How CDOs View Data Ethics: Corporate Conscience Or More Regulations?

Ronald van Loon

We really are in the midst of a data revolution. With a huge amount of data being generated every day, organizations are encircled left, right, and center by data and the analytical tools that are required to handle it. Leveraging this data has given companies unprecedented insights into different customer preferences and how they can cater to these needs. With all the emphasis on data and the capabilities it holds in the current world, should there be a question regarding data ethics?

Recently, I got a chance to attend SAPPHIRE NOW by SAP. At the occasion, I was asked to moderate the International Society of Chief Data Officers event along with Franz Faerber, executive vice president at SAP, and Michael Servaes, executive director, International Society of Chief Data Officers. The event was graced by some very knowledgeable attendees, who shed light on the importance of data ethics and the way forward.

Speaking at the event, I talked about the different uses of data in place in the world today, and how that shapes our present and future. Most companies today are no longer competing with their competitors, but are now up against the bar set by their customers’ expectations. This bar has been set by the excellent service provided by companies such as Google and Facebook. Every touch point is important, and organizations need to realize this. Data analytics is the way forward. With all these advances, a question arises: Is the use of data going forward ethical? The role of the chief data officer here is to deliver a great customer experience by managing what they do with their customers’ data.

How to define what’s ethical

The first question is about what’s ethical and what’s not. There seems to be confusion in this regard, and most organizations cannot reach a consensus on a definition. The panel that I witnessed in the CDO event had well-defined answers, however, outlined below.

The first step is to run the “sunshine rule.” This rule basically means how you would feel about your organization if your own data were out in the open for everyone to see. If you wouldn’t mind, then you wouldn’t have any reservations in terms of ethics. But if you wouldn’t be comfortable, you should question the ethics of using it. This is a litmus test designed for getting answers based on the truth. Give the answer based on what you truly feel, and you’ll be able to tell whether your use of data is justified or not.

Similarly, there are other litmus tests for finding the ethical aspect of using data. For example, you can also imagine a scenario where your data is published in the newspaper. Would you feel comfortable or threatened? Moreover, the panel members got on the lighter side, imagining how you would feel if your significant other found out. Will you be able to stand as the same person, or would the unethical use of data kill you?

The role of the chief data officer

Chief data officers, or CDOs, are the leaders of the data functions in their organizations. They also play an important role in helping abide by the relevant laws and regulations. The General Data Protection Regulation (GDPR) is one that CDOs must be well-versed in, not only those in Europe but anyone else that does business with European citizens. All panel members agreed that the CDO should keep their team in the loop at all times, rather than to go along with their own opinion. If even one person on the team feels that the data is not being used in ethical ways, the CDO should be able to take the required steps to address the issue.

Until very recently, CDOs were considered the new kids on the block, and many other C-level executives didn’t rank them at the same level as themselves. However, these rising stars of the digital business have now taken the center stage in deciding ethical standards. One of their most important roles is to make fine judgment calls that don’t trespass the line between trust and innovation. It is important to realize the trust organizations give CDOs and then work on it to ensure that their trust is respected.

Impact of algorithms

While the world of data can be considered as impressive and transformative, there have been instances where algorithms have gone wrong. These instances have happened because of a wide variety of reasons including human biases, usage errors, technical flaws, and security vulnerabilities. For instance:

  • Many social media algorithms have attracted the wrath of viewers over how they influence public opinion. Just recently, we saw Google wrongfully attributing the views of a shooter in Los Angeles. Google later took the blame, but these algorithms can dictate public opinion.
  • Moreover, during the Brexit referendum in 2016, we also saw how algorithms were blamed for the flash-crash of the pound by over 6%.
  • Moreover, investigations in the United States have also found out that algorithms in place within criminal justice systems have been biased against a certain racial group.

Best practices

To effectively manage the ethical implications of data, CDOs should take the reins and adopt new and better approaches for building stronger foundations. There should be better algorithm management, and CDOs using data analysis tools should ensure that they take care of the ethical issues. Only then would they be able to use that data for something feasible.

We used multiple voting at the event and concluded that data ethics should be declared as a guideline on the corporate level. More than 90% of the CDOs in the audience agreed, and with growing regulations in this regard, increasing ethical checks on data are more of a necessity than a want.

For more on this topic, read “Establish Trust In The Digital Age.”

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Ronald van Loon

About Ronald van Loon

Ronald van Loon helps data-driven companies generate business value. He is recognized as one of the top 10 Global Big Data, IoT, Data Science, Predictive Analytics, and Business Intelligence Influencers by Onalytica, Data Science Central, Klout, and Dataconomy. He is an author for leading Big Data sites like the Digitalist Magazine, Datafloq, Data Science Central, and The Economist. He is a public speaker at leading Big Data, Data Science, and IoT events.