1. What could be the new model of ethics based governance to preserve values and achieving profits?

The first point of consideration is to get rid of the myth that preserving values is somehow in conflict with achieving profits. Profits would be more certain when the focus is on the needs of the customer, compelling offerings or great sales teams rather than short cuts bypassing ethical standards.  While there might be short term gains but violating ethical norms have a much larger intangible cost in terms of setting bad precedence, a toxic and fearful culture that permeates the psyche of an organization and ultimately reflects on business results too. Once this basic premise is in place, setting policies that address the larger issues of ethical governance can be achieved in such a way that individuals and organizations feel empowered and safe – and not constrained and fearful. To that extent, the most important aspect of ethical governance is a mindset shift in leaders and stakeholders who will define the culture the organizations have. People do not come into organizations with the mindset of being unethical and rarely would anyone think of themselves as having low integrity.  They observe, learn and see how leaders react to constraints and either learn or unlearn ethical decision making.

The 2020 WEF at Davos had an overarching theme of sustainability and stakeholder accountabilities and a large part of that mandate is about ethical governance and inclusion. That means not just corporate responsibility towards customers and shareholders but to the environment, regions, and society in general. The paradigm that has shifted for all organizations due to technological innovations and digital disruption is that the landscape has spread much beyond the immediate work-related environment, to an ecosystem of a vast global digital and artificial intelligence platforms, online vendors and partners, students and educators, consumers and employees. Industries have converged to create new operating models and digital ethics is an area of deep research. We now need to be accountable for our impact across digital platforms, environment and ecological balances and societal conflicts as well. Companies that practice this in their policies, ban working with vendors who employ child labor or burn protected forests or dump toxic waste in rivers. Digital platform companies are owning responsibility for online frauds and taking steps to work outside of company boundaries to bring in the safety of digital identities. 

So to my mind the basic principles of ethical governance in the corporate world today needs to have these 4 elements:

1. Instead of a 2-dimensional win-win approach that focuses on the organization and its clients or shareholders, organizations have to bring forth a WIN-WIN-WIN approach, which begets thinking about societal change, corporate citizenship, integrity and ethics across all its policy frameworks. This is where alongside corporates and their clients, the employees, customers, and society win too. 

2. Trust & Transparency will need to be demonstrated and earned – not just stated on corporate policies. Hence policies need to be clear and specific, to be able to hold people accountable and define actions that demonstrate zero tolerance for unethical conduct. This involves building trust and transparency in the Artificial Intelligence platforms as well

3. The decision making around recognition, rewards, and incentives drives corporate cultural norms. It is therefore critically important that value-based leadership behaviors are recognized and rewarded and these need to get reflected in related policies. Such leaders will likely then nurture talent that demonstrates higher purpose and values as their code of conduct.

4. Keep ethical Policy frameworks simple and in the flow of work – Work allocation, target assignments, expectations setting, and performance metrics need to follow the principles of fairness and equity as well to ensure opportunities for unethical practices are minimized. Very complex or cumbersome policies and procedures lead to fatigue, related to bureaucracy and that can also lead to unknowing ethical failures. Keeping things simple but anchored with positive culture and behaviors are much better guardrails for ethical governance.  

2. What must be done at the policy level to assure an environment with less of power politics and misuse of powers?

As mentioned, one can write several volumes of policies with a lot of specificity and clarity on every process and transaction, and still not be compliant on trust and ethics because policies are often open to interpretations. We need value-based governance because not everything can be stated in policy documents. This is why the ethical aspect of governance or leadership relates to organizational culture and corporate values. Power or Politics are not negative words in general and might even be needed in some situations - but when used to further unethical agendas that bypass principles of trust, integrity, fairness, equity then it leads to governance pitfalls. Aside from the focus on a culture of openness and trust, the best way to minimize power play for unethical agendas is to have clearly outlined strictly enforceable policies and programs for whistleblowing, platforms for bringing issues to an impartial investigative body and empowerment to employees to speak confidentially without fear of reprisals. Again this is less about policy and more about its practice in spirit. If employees do not see the consequences of misuse of power, there is a greater risk that someone might repeat those mistakes. Therefore not only is it important to consistently educate everyone on the principles or ethics and integrity in spirit, but also important to let people know their grievances were heard and acted upon. The closure is important to any whistle-blower policy.

3. What should be an idle CoBe (Code of conduct and Business ethics) that should be incorporated to sustain Gen Y employees

There is no separate code of conduct for any specific generation of workers – be it millennials or baby boomers, and should not be. Business Conduct guidelines and codes of ethics and integrity need to be consistent and standard for everyone. However, with new digital technology and social media platforms becoming more prevalent and accessible to everyone, employees using their personal devices like phones and iPad for work, there is a strong need to incorporate additional guidelines and policies for digital platforms, social media access, and disclosures, privacy and consent aspects for all stakeholders. Because Gen Y and Gen Z are also the more digitally savvy generation – they are more comfortable and have higher leverage of online platforms, and therefore might be more vulnerable to digital integrity issues. Organizations, therefore, need to be aware of the trends of Gen Y and Gen Z preferences and ensure that the policies address any pitfalls thereof. For example, it is important to highlight what kind of information can people share on Facebook or LinkedIn or what communication can or cannot be done via WhatsApp. Europe has a much more stringent set of guidelines with GDPR therefore and many countries are following similar approaches. Many Social media companies are now being asked to regulate online information dissemination for similar reasons. 

Aside from all the Intellectual property and regulatory guidelines that are applicable for every organization, Code of conduct and business ethics documents must additionally address these aspects in today’s context:

• Principles and practices on dealing with vendors, business partners and government agencies that have fraudulent practices of any nature

• Guidelines around cybersecurity, privacy and digital behaviors including social media guidelines

• Very specific guidelines around data integrity, data collection, privacy and how artificial intelligence algorithms are being used to design and deploy offerings or products if any.

• Conflicts of interest scenarios for employees, clients, and stakeholders, declaration of close financial relations

• Very clearly articulated sexual harassment policies and clear policies around dating and personal relationships at the workplace. These are especially important in light of recent movements like #metoo.

4. Please highlight a successful whistleblowing policy and its enforcement

A good whistleblowing policy is about a platform that provides a safe way to bring the issue to the forefront, anonymity and confidentiality assured to the person who has a grievance so that there is no fear of reprisal, structured and impartial investigative support, and a closure mechanism. One of the good practices in today’s context is to have a Trust and Compliance officer who can help formulate the right policies aligned to the needs of the current world and can also help the organization implement such policies fairly and with the right mindset. Business executives and managers typically do not have adequate time to probe every misstep at work but when there is a robust mechanism for grievances and complaints, a strong HR and Legal system under an overall umbrella of a Trust and Compliance officer it sends the right messages to the organization about their intent. It is also extremely important to ensure that employees are well aware of the policies and hence communications about policies need to happen periodically and consistently.  Discreet communication protocols are equally important to help with the right messaging. What is non-negotiable in the context of a whistleblower policy is preserving the anonymity and confidentiality of the complainant and promise of no reprisals for a fair investigation.

 

5. What ethical obligations does c - suite have in business overall conducts which need to be addressed in the digital era? Please share some tips that you would like to strongly recommend for c - suite when it comes to making ethical decisions?

In any organization, the leadership has the critical obligation of being role models for the codes of conduct set for everyone. They often represent the organization in external forums and are therefore also custodians on the reputation that a company would have for ethical standards. However, a large part of leadership decision making falls out of the purview of formal contracts and where judgment calls have to be made on grey areas of the scope of work. This is where their leadership is even more critical in ensuring that the unwritten principles of fairness, equity, privacy, transparency, etc are kept in mind when making decisions. Therefore, leadership also has a large role to play in setting the right organizational culture for ethical governance.

In the digital era however, governance principles are getting revised frequently as organizations realize some of the pitfalls of online digital transactions. Digital ethics is of significant focus in every organization. From crypto-currency transactions to blockchain, understanding the implications of hosting servers on a public or private cloud, how phone apps are being used for payments, awareness of cyber-crime and fake news all comes in the purview of basic education that all leaders must actively pursue. Leaders at C-suite level might not deep dive into the details of the the ‘terms & conditions’ that all online platforms have you ‘accept’ prior to any digital transactions, but they do need to set the management system that ensures their teams read them and understand implications of conducting an online business transactions so that there is no violation of ethical, legal, copyright or intellectual property rights of clients or competitors. A simple example is for a Chief Marketing Officer is to be aware of their organization’s logos are being downloaded online by external parties and misrepresented in any forums. The CMO could, therefore, set guidelines and process for use of the company logo in events. CHROs need to ensure that employee’s privacy is respected when collecting their personal data from digital platforms for records. 

However, the largest concern on digital ethics comes from the organizations that leverage artificial intelligence. The issues of AI bias and trust in the algorithm designs is an evolving debate and is an area where significant research efforts are ongoing. For example, my own company IBM which has the Watson AI-enabled platform at its forefront of customer offerings is doing extensive research around Building Trust in AI and has set very specific principles for algorithmic coding in such systems to minimize bias.

According to a new study by IBM’s Institute for Business Value, 82 percent of all enterprises and 93 percent of high-performing enterprises are considering or moving ahead with AI adoption, because of this technology’s ability to drive revenues, improve customer service, lower costs, or manage risk. However, the same study found that despite the huge advantages of AI, 60 percent of those same companies also fear liability issues. Many policymakers and researchers are also wrestling to answer the main questions around the ethics and retraining needed in AI’s adoption. IBM has turned our decades of experience into a formal set of guidelines called IBM’s Principles of Trust and Transparency, which includes guiding principles about AI design, development, and usage.  These principles are a guidebook for how companies can design and deploy new technologies in a way that advances the march of societal progress and wellbeing. In 2019 IBM was recognized as one of the most ethical companies in the world by Ethisphere Institute. 

From a Leadership skills perspective, however, the most important implication of AI-enabled systems is that since routine jobs will likely be done using algorithmic principles in AI systems, humans will need to develop higher level of critical thinking and decision-making skills to manage the future of work, assess risks due to AI bias and will need to use digital intelligence to solve problems. This then means that leaders of the future need to focus on building a deeper level of analytical and creative thinking, complex decision making and other softer skills. 

Given this landscape for the future of work, here are some basic tenets of how leaders can make an impact in the digital era, keeping in mind principles of ethical governance:

1. Be role models of completing all education that is rolled out to bring awareness of the latest code of conduct guidelines. Constantly learn and be aware of the latest in the area of building digital intelligence. Ensure everyone in the team complete the required education regularly

2. Be actively aware of the key areas where there is a danger of pitfalls or being blindsided on violations and keep the focus on those areas. 

3. Consult the Chief Trust and Compliance officer for any ambiguity in taking the right decisions, especially in areas where governance principles might get compromised. 

4. Continuously learn and build skills for data governance, data analytics and creative and analytical thinking, soft leadership skills as these will be more and more in demand for managing work and teams in the future.