Perspectives

The CLO strategist: Ethics and technology

A framework for CLOs to lead in developing an ethical tech strategy

As technology brings enhanced capabilities to organizations, chief legal officers (CLOs) are facing questions about ethical use. You don’t need to be a tech wizard to manage the associated legal risks, but CLOs need to understand the importance of ethics in technology and make decisions accordingly.

Ethics of technology and keeping bias at bay

Technology or its use becomes ethical when its design, delivery, and innovation are guided by principled thinking. With technology advances, the associated risks have grown increasingly complex, and the concerns are no longer just centered around data. For example, despite its adaptive predictive power and autonomous learning, artificial intelligence (AI) doesn’t operate quite the same way as human intelligence. Without adequate safeguards, an AI system may exhibit the following cognitive risks that can have legal implications for the organization:

  • Bias risk: Preserving disadvantages to certain groups or classes based on historically biased data sets
  • Accuracy risk: Building models that don’t accurately capture ongoing, real-world situations
  • Tampering risk: Manipulating models to produce outputs that don’t reflect the stated objective

To safeguard against these risks, organizations need to make informed, thoughtful decisions about the design, development, implementation, and use of a wide range of emerging technologies.

The CLO strategist: Ethics and technology

The five self-reinforcing choices

To develop a strong ethical tech strategy that bolsters fairness, reliability, and accountability, consider the five self-reinforcing choices, adapted from Lafley and Martin’s seminal guide:

  1. Vision
  2. Focus
  3. Value
  4. Capabilities
  5. Leadership

Let’s look at ethical tech strategy through the lens of these five choices:

Articulate a sense of purpose, define your aspirations, and describe what success looks like.

The CLO needs to anticipate potential regulation on the appropriate uses of technology, advocate for the company as governments take up regulatory matters, and help the board and other executives navigate the regulatory landscape as it concerns the business. In addition, the CLO needs to develop an understanding of how technology is used in the organization and its effect on the business’s legal exposure. One way to do this is by examining the impact of tech through three ethical lenses: individual, society, and culture.

The CLO also needs to understand technology’s relevance to the legal function. This means knowing where risk might present itself in applications the legal department uses, as well as in applications used throughout the enterprise and those that third parties develop and use.

Clearly define what you will and won’t do.

The CLO should evaluate each technology asset’s potential ethical concerns. Along the way, as the organization’s conscience, the CLO can help determine what the organization should do versus what it can do (e.g., read customers’ emails or access certain health information).

As use cases for advanced technology broaden, risks may include discriminatory practices, inaccurate estimations, unexpected outcomes, operational disruption, or data breaches. An ethical tech check becomes important as it can reveal priority risk areas.

Identify the differentiated contributions that enable competitive advantage.

CLOs can work with functional leaders on a testing and remediation program that tackles the three dimensions of AI risk—bias, accuracy, and tampering—before they become problems that have legal, regulatory, reputational, and financial repercussions. With a program like this in place, the organization will likely be better positioned to navigate the changing public policy landscape.

Determine existing and in-demand assets and competencies, then identify investments, processes, and technologies to support them.

CLOs can help the broader workforce understand how to recognize ethical dilemmas in the application of technology; their responsibilities toward addressing ethical tech issues; and where they can go for tools, training, and other institutional support. Among the executive team, the CLO can help cultivate a mindset that embeds an ethical analysis into the development and application of technology.

The CLO can set an expectation for practitioners to become conversationally competent in technology disruptors and their legal implications, including the potential ethical impacts. That provides the legal team with a common vocabulary for ethical tech dialogue among themselves and with their colleagues across the organization.

Consider the culture, talent, training, and behaviors necessary to enable success.

According to research from MIT Sloan Management Review and Deloitte, committed leadership distinguishes companies that have embraced ethical tech from those that have not. As someone schooled in judgment and ethical decision-making, the CLO is a logical choice to marshal leadership support.

CLO leadership is also necessary because the past several years have seen numerous attempts to regulate specific AI technologies—think facial recognition and autonomous cars—as well as AI more broadly. As AI technology-specific regulations begin to appear, companies could benefit from the leadership of their CLO in proactively developing a strong ethical tech strategy. Lawyers often have the skills necessary to analyze AI risk—with or without a technology background.

Putting strategy into action

As a business advisor, CLOs—along with the rest of the senior leadership team—can shape the organization’s risk culture and serve as role models for exemplary behavior. The CLO can bring the legal perspective to a controls framework that helps organizations address risk. As the legal function leader, CLOs can prepare their team to anticipate and mitigate risks by checking that the legal team knows how to use the ethical tech framework, inviting all stakeholders to have a seat at the table, holding regular check-ins on ethical tech risks, and evaluating actions as workstreams end.

Consider the following:

Operating environment

  • Conduct a risk assessment: Identify and catalog models used across your organization and assess the inherent risk exposure of each. Consider the potential impact of operational failures or bias and evaluate how data is used in algorithms.
  • Develop your technology risk strategy: Collaborate with stakeholders across departments that deploy, use, or are affected by technology to draft an organization wide strategy to manage potential technical and operational risks.

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Technology risk testing and control

  • Define a review and remediation approach: Develop an approach for applying techniques to detect and mitigate potential model risks and to evaluate how a model is used. This approach can be used to review existing and new models.
  • Plan a model risk monitoring program: Define procedures and set key performance metrics to proactively screen for algorithmic bias and ethical tech risk. Determine how often to execute these procedures for each group of models.
  • Designate a review team: Form a team of technology risk reviewers, independent of the model development teams, to provide an assessment of model and ethical risks. This team can proactively investigate allegations of bias, tampering, and model malfunction.

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Ethics for a new era in technology

Digital technology has become an inescapable presence in our lives as well as table stakes for competing in the market. But technology is developing faster than many organizations’ ability to set up guardrails for it. Rather than try to define and codify every responsible practice, the CLO can give people in their organization a mental model to use for making ethical choices. A principled approach to technology can help mitigate risk and build a reputation for trust that can sustain the organization for the long term.

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