In an era of mistrust, as an annual Edelman study highlights, customers and other key stakeholdersâ faith in the institutions they deal with is diminishing. Turning that statement on its head, however, those businesses able to buck this trend and reconfirm a bond of trust with stakeholders will have a distinct competitive advantage: 58% of consumers buy brands based on their beliefs and values; 60% of employees choose their employers for the same reasons; and 64% of investors make key decisions with these factors in mind.
Corporate digital responsibility now sits at the heart of this debate. Significantly, trust in technology companies has suffered markedly in recent years, amid increasing concern about use of customer data and the practices that underpin some digital products. Moreover, research increasingly shows that trust is much greater in businesses perceived as having strong data protection and robust cybersecurity defenses than those who are perceived to lack them.Â
In other words, strengthening digital responsibility can drive value creation. Those brands regarded as more responsible will enjoy higher levels of stakeholder trust and loyalty. These businesses will sell more products and services, find it easier to recruit staff and more straightforward to raise capital and enjoy fruitful relationships with shareholders.Â
If that sounds simple, for many organizations, the penny does not yet seem to have dropped. One explanation for this is the weight of regulation related to digital responsibility with which businesses are now dealing. The response to exacting standards such as the European Unionâs General Data Protection Regulation (GDPR) has inevitably left many organizations looking at digital responsibility through a compliance lens. The new Digital Markets Act and Digital Services Act exert a similar influence.Â
Another issue has been the near-hypnotic allure of emerging digital technologies. Advances in areas such as artificial intelligence (AI) and data analytics appear to offer a short-cut to smarter, quicker decision-making. Too often, however, organizations have overlooked the inherent risks of such black boxes, which can obscure the presence of biased data and unsuitable modelling that ultimately leads to poor outcomes.Â
This is not to suggest that businesses should put their compliance responsibilities to one side or give up on the potential of digital technology, which, when implemented carefully, can be an invaluable tool to support the achievement of strategic and operational goals. However, those that do not also see the clear link between greater digital responsibility and value creation will miss a golden opportunity.Â
A growing number of businesses do now recognize this. US-based technology company Apple, for example, has increasingly put data privacy at the core of its brand strategy. Since 2021, for example, its iPhones and iPads have included a simple option for users to prevent third parties, such as advertisers, from tracking their data.
Such features have proved immensely popular with customers: 94% of Appleâs US customers have chosen to opt out of data collection. And, as a result of offering this facility, trust in the business has improved. Apple now enjoys ratings on metrics such as net promoter scores that are well ahead of those of comparable companies, who are following its lead in a bid to catch up.Â
Businesses in other sectors are also grasping the opportunity. Swiss insurance company Die Mobiliar, has deliberately chosen to look at its data strategy as a business enabler. In practice, that required the business to build an interdisciplinary team to work on data strategy, including representatives from functions such as Compliance, IT and Business Security, while maintaining alignment with overall business goals.Â
It is an approach that has paid off, believes Katrin Lange, Corporate Foresight Manager at Die Mobiliar. Speaking to IMD, she explained: âWe have earned a solid reputation with our customers, who entrust their [sensitive] data to us as an insurance company. We recognized that, if we spoiled that reputation by doing something untrustworthy with data or AI, we could block all future opportunities, whatever they may be.âÂ
German beauty and ânaturopathicâ medicines company Weleda provides another example of what is possible when digital responsibility is embraced while maintaining a value mindset. Weleda was quick to recognize the potential of technology such as robotic process automation (RPA) to drive productivity, but it was also acutely conscious of the potential impacts on employees, who might understandably fear being replaced by machines. The company responded by pledging that any increased use of automation would not result in staff reductions or job losses; rather, it promised to upskill employees and move them into new roles if required.Â
In IMDâs research, Jakob Woessner, Weledaâs Manager of Organizational Development and Digital Transformation, explained: âOur values framed what we wanted to do in the digital world, where we set our own limits, where we would go or not go.âÂ
As the Weleda example demonstrates, the imperative to prioritize corporate responsibility has not simply accompanied the rise of digital transformation; many businesses developed a keen sense of duty and obligation while operating in the analogue world. The challenge now is to translate those values to the newly digitalized organization, rather than re-inventing them. Â
The pharmaceutical sector provides one example of what that means in practice. For many years, leading pharmaceutical companies have operated ethical committees with the responsibility of assessing clinical trials of new drugs â ultimately, to ensure that drug development work prioritizes better health outcomes. Now, businesses such as Germanyâs Merck are evolving that approach for the digital age.
When Merck began using AI tools in drug discovery and big data applications in human resources and cancer research, it set up a digital ethics advisory panel to offer guidance on issues such as data usage, algorithms and new digital innovations. The panelâs first task was to develop a Digital Code of Ethics for the business, as it developed a new technology platform integrating healthcare data from different sources to support cancer research.
The goal of such initiatives is to harness the undeniable potential of new technologies in a way that does not undermine the businessâs integrity, or damage its relationships of trust. Such work takes key stakeholder groups on the digital transformation journey with the business, rather than imposing change upon them while offering them little agency or transparency.
Even small gestures can be powerful in this regard. At Die Mobiliar, any customer turned down for insurance during an online application has the right to speak to an employee and request an explanation in person. Similarly, at Weleda, the company maintains a dedicated email account through which employees can submit questions or concerns they may have regarding digital responsibility.Â
For those organizations just beginning to think about corporate digital responsibility, the scale of the task may seem daunting, but acknowledging the value drivers will help concentrate minds across the business and secure support.Â
The key is to get started. Identify the intrinsic beliefs and core principles that govern the businessâs operations and goals. These will provide a guiding light in every conversation about digital responsibility.
Having established these guiding values, companies can begin to identify the particular risks to which they may be exposed as they digitalize. Naturally, these will vary from sector to sector, and between organizations. But this exercise will help the business focus its corporate digital responsibility work where it is most needed.Â
The final piece in the jigsaw is to move from risk to opportunity: to identify where digital responsibility can help the business project itself as an entity in the marketplace that is worthy of stakeholdersâ trust. This is where the value creation story will start to get really interesting.Â
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