Digital Ethics: Do you practice what you preach? has been saved
Digital Ethics: Do you practice what you preach?
Corporate social activism and the repercussions of not acting responsibly
Although companies have recently engaged in more visible activism, numerous incidents have shown the consequences of not aligning data practices with company values and subsequent messaging: loss in consumer trust and reputational damage. It is therefore of high importance to assess how to deal with the complexity and ethical risks of data and technology, as closely aligning your data strategy and policy with your statements on societal issues is an imperative for engaging in credible corporate social activism and pursuing digital ethics.
by Ge’ez Engidashet
Corporate Social Activism
Businesses have recently flooded their communication platforms with statements of support and pledges of donations to civil rights groups, positioning themselves as socially aware, ‘woke’ or even ‘activists’. However, the majority of statements aren’t driven by a deliberate, consciously thought out brand activism strategy rooted in the company purpose and values. More often, they are incident-driven, lacking a credible foundation. However well meant, these statements can be perceived as disingenuous and merely a marketing activity.
As governments seem too polarized or impotent to adequately act on tackling certain societal problems, consumers are looking towards businesses to make a positive contribution to society. In 2018, a study showed that 64% of consumers would reward firms which they see as engaged in activism. As it is no secret that public opinion can drive corporate behavior, it is clear that expectations for companies to take an explicit stand on societal issues are growing. And with their reach, they can be a differentiating factor in a fast-paced corporate marketplace.
Whether their activist strategy matches their actual business practices is a different story as multiple businesses hurried to communicate their position on societal issues, but numerous were called out for not having their internal processes and culture aligned with their public statements. Deliberately exaggerating the extent of your ethical behavior is known as ethics washing, and the potential consequences this poses can be extremely damaging, on different levels: financial (consumer boycott), operational (employees refusing to work, and distributors and clients refusing to work with you), and reputational (loss of credibility and reputational damage).
A recent example of a company being scrutinized for ethics washing is Facebook. The tech giant promised to make contributions to organisations focused on racial equality and criminal justice reform. As Facebook’s data practices aren’t seen to be aligned with this progressive messaging, hundreds of companies paused their advertising on the platform, joining the Stop Hate for Profit movement. By halting advertising, these companies are taking the role of ‘regulator’ – enforcing a change of Facebook’s data policy by hitting it where it hurts: their advertising revenues and credibility as the pro-social platform they claim to be.
Not only big tech is struggling with this challenge. Other types of organisations also find themselves navigating the relatively new technology arena that have to drive the strategic objectives of a company, and meet expectations of stakeholders in an increasingly globalized context of a complex and dynamic societal landscape. How can they credibly take a stand on societal issues without the risk of being accused of ethics washing with regards to their use of data?
Responsible Business: Doing Things Right so you can Do The Right Thing
Assessing how companies deal with their data and technology processes is of critical importance in order to detect risks of unintentional profiling, unconscious bias and discrimination. Ethical considerations should be built in from the start i.e. ‘by design’, and supported by the companies purpose and values, not only as an add on at a later stage when developing the brand/ communications strategy.
In our experience, resilient companies and their leadership know where the blind and weak spots are in relation to data and technology that can potentially damage their credibility and license to operate. At the same time, due to the disruptive technologies companies don’t have a sound story on (the use and development of) their data policy. In most cases, data policies lack a connection with company purposes and values, and consequently, are a mismatch with the expectations of customers in particular and stakeholders in general. Receiving insights on stakeholders, in combination with developing company values and standpoints and translating these into their data policy might prevent ethics washing from occurring. Consequently, being transparent by informing stakeholders on how their data is used via their marketing communications increases trust. Understanding your risks, allows you to move forward effectively. By doing things right, you can do the right thing.
An impactful organisation, standing behind ‘doing the right thing’ is the World Federation of Advertisers (WFA) who recently launched a guide in which it advises advertisers to use consumer personal data in an ethical way by pursuing four key principles:
- Respect: all data usage should respect the people behind the data and companies need to strive to understand the interests of all parties and use consumer data to improve people’s lives.
- Fairness: data usage should aim to be inclusive, acknowledge diversity and eliminate bias rather than dividing groups. Brands need to examine their data sets, mindsets and governance approach to ensure they are inclusive in the way they use data.
- Accountability: Consumers expect companies to have open and transparent data practices backed up by robust global and local governance. The same standards should also be applied across partners, suppliers, publishers and platforms.
- Transparency: Although the online advertising ecosystem is complex, brands should apply transparency principles and work towards more open and honest data practices, particularly as AI and machine-learning approaches start to automate decisions.
We, as well as the WFA, believe doing the right thing by practicing internally what you preach externally, will ultimately lead to rewards of brand positioning, corporate identity and customer trust. Developing data policy in such a way that financial, operational and reputational risks are minimized is necessary for doing good business, but above all necessary for doing business responsibly. Trust isn’t easily created, but must be won over time by ensuring your data policy supports your communications. Organisations that have taken or want to take a public stand on societal issues and develop a brand activism strategy, should therefore build or adapt their data policies first and consequently align their practices with what they preach. In today’s world there is no room for neutrality. Instead, your customers expect you to do the right thing.