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:

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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