September 27, 2021
The global issues we face today are multifaceted and interconnected, and they are becoming increasingly complex each day. Increasing economic inequality, racial discrimination, and geopolitical strain are all posing significant challenges to society. Simultaneously, the digital revolution is transforming the global economy, and these changes have profound effects on the way you live and work. Moreover, with an increase in fraud, fintech emergence and cybersecurity threats, the words “compliance” and “ethics” are often used interchangeably in regard to organizations doing what is best for their stakeholders
For the avoidance of doubt, the term compliance is used in the context of corporate governance to describe obeying the law. Conversely, whether the law permits it or not, ethics is about doing the right thing.
In this article, I will discuss in brief two points: leading through an ethical lens and ethically handling personal identifiable information (“PII”) as a strategy to reducing fraud.
Leading through an ethical lens
It's a given that leaders make decisions daily. Regardless of the size or significance of the decision, these choices often reveal a snapshot into the deeply ingrained values in a leader. Leadership in an increasingly complex and ambiguous world places board of directors, c-suite leaders and managers in situations where we must make choices with risks and opportunities on both sides of the fence, differing opinions about what is an appropriate choice, and the lack of adequate information to guide our decisions.
In these circumstances, formulating a systematic approach or framework would lead to ensuring that organizations are making consistent decisions that are aligned with their core values. Before every decision is made, leaders must consider the core values of their organization. Also, gather timely and relevant information to help with research on the topic. Then consider the risk and rewards of the pending decision. Finally, communicate the decision with clarity and monitor its impact.
Ethically handling Personal Identifiable Information (PII)
The PwC Global Economic Crime and Fraud Survey 2020 revealed based on their over 5,000 respondents who represented 99 territories that they experienced tangible losses over US$42B due to fraud. Additionally, customer fraud and cybercrime were the two top crimes that were frequently experienced. Facts like these and other factors have pushed organizations to consider artificial intelligence and automation to reduce the impacts of fraud.
Historically, fraud is detected after it has occurred. However, by leveraging automated processes to detect fraud almost in real-time, leaders can mitigate these risks. This is accomplished by PII assisting organisations establish benchmarks that are used as triggers in fraud prevention. An additional aspect to consider is the enhancement of the regulatory regimes surrounding PII like the European Union’s General Data Protection Regulation (“GDPR) that include guidance on how companies must manage PII. Therefore, organizations must be careful when collecting and using personal information, taking steps to safeguard against data breaches, including adopting policies that establish limits on the collection and use of personal information.
Thus, it is imperative that businesses carefully consider how they will handle fraud - including what technologies and procedures they will use to remain compliant with applicable laws and where there are no laws, doing what is right. Enterprises should adopt ethically clear and transparent policies that govern how PII is used.
In short, in an effort to be ethical and compliant – a balance in the ethical framework, its deployment and management of PII must be met.