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What Should CEOs In Self-Regulated Industries Learn From UK Web Crackdown?

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“The era of self-regulation for online companies is over,” said culture secretary Jeremy Wright on 8 April, as he and his colleague, home secretary Sajid Javid, unveiled their joint white paper Online Harms: a set of proposals for extensive, new controls on internet-based firms that allow dangerous content to prosper on their platforms.

The measures outlined in the document are the world's first online safety laws.

“Voluntary actions from industry to tackle online harms have not been applied consistently or gone far enough,” Wright stressed. “Tech can be an incredible force for good and we want the sector to be part of the solution in protecting their users. However those that fail to do this will face tough action.”

In the nitty-gritty of the white paper’s text, Her Majesty’s government states: “We are exploring possible options to create new liability for individual senior managers. This would mean certain individuals would be held personally accountable in the event of a major breach of the statutory duty of care. This could involve personal liability for civil fines, or could even extend to criminal liability.”

While the proposals have ostensibly been devised and announced with online giants such as Google, Twitter and Facebook in mind, the white paper does indicate that small firms are also on the government’s radar. Indeed, some commentators have already suggested that any site outfitted with crowd-sourced reviews, comments-thread functions or profile pages for individual users, could fall under the purview of the new, state regulator that looms at the heart of the proposals.

It’s a tense moment for senior figures in the digital industry and places them immediately in unfamiliar, counter-intuitive terrain.

The main reason for the unease that those leaders may be feeling is that they have traditionally relied upon three, blanket layers of deniability as waivers for the material that appears on their sites: i) the open-web ethos championed by Sir Tim Berners Lee, ii) a free-speech defense and iii) the argument that their sites aren’t actually publishers – merely venues for curating other people’s content. For a long time, those articles of faith have effectively cushioned digital leaders against notions of liability.

In the UK, a variety of self-regulatory bodies exist to monitor industries such as the media (the Advertising Standards Authority, the British Board of Film Classification and the journalism-focused Independent Press Standards Organisation and IMPRESS), finance (the Financial Conduct Authority) and the legal sector (the Bar Standards Board and Legal Services Board). Typically, those organisations are funded from within the industries they regulate, requiring their senior teams to maintain high ethical standards to forestall notions that the businesses in those sectors are effectively marking their own homework. In the case of digital corporations with particularly large user bases – such as Google and Facebook – the expectation up to now has been that they would regulate themselves by tasking internal departments with the relevant watchdog functions. That time has now passed.

Businesses in self-regulated industries have much to learn from the digital sector’s sudden emergence into a new reality – particularly in terms of how to maintain their customer relationships, manage risk and conduct themselves as corporate citizens.

In the Institute of Leadership & Management’s 2017 report The Five Dimensions of Leadership: Authenticity, we quoted Deloitte CEO James H Quigley’s take on the relationship between trust and the bottom line. “Simply put,” he said, “those who bend rules are not considered trustworthy, and without trust an individual’s value is severely diminished. Without trust and confidence, markets do not function, and value is destroyed.”

If one defines authenticity – as we at the Institute do – by business philosopher Charles Hampden-Turner’s notion of “what lies between people” then, as I see it, that space is where you want trust and integrity to find a natural home, and flourish. It is also the space in which you make a conscious commitment to want the very best for people, and to put in place systems and processes that will bear that out. This applies in particular to how you interact with those who are crucial to your organisation’s performance. As Hampden-Turner notes: “To be authentic you must communicate to others what you think and what you feel without disguise or tactical cunning.”

So, you want the best for your customers. You want the best for your suppliers. You want the best for your staff. And you’re determined to prove that in practice. Now, with that outlook as your starting position, self-regulation becomes quite a straightforward matter. Indeed, there would be no need for organizations to be regulated at all if everyone worked from the underlying principle of safeguarding the best interest of their stakeholders.

The line that we have heard so frequently from internet companies is, “Oh, we’re not publishers – we just support free speech and provide a platform for people to share their content.” It’s hard to deny that there is something seductively liberal about that. And of course, given that free speech is such an important part of democracy, you can see why it makes such a compelling argument.

But do internet companies exist purely to provide a platform for free speech? No, they don’t. They exist to provide some sort of service to their customers. And if they want the best for their customers, then they will do the right thing by them, which is to protect them from harm. Not exploit their customers; not allow third parties – as we saw with Facebook’s Cambridge Analytica scandal – to take advantage of their customers, or any other group in their sprawling networks of stakeholders.

So, if our intentions are genuinely honorable, what lies between people is about having individuals’ best interests at heart. From a leadership perspective, the key here is to frame that commitment as something personal, rather than some remote, vague, idealistic concept. For example, leaders could ask themselves: “Is that function or content doing the best for 15-year-old girls as a social group? Would it be doing the best for our users if one of them was my own daughter? Is the availability of that function or content doing the best for the businesses in our network, who rely upon us for infrastructure?”

In my view, whether or not there is a regulator watching over your business, you should welcome any opportunity to be scrutinized – for if you have taken time to think about the values system that lies between people, your standards will be at least as good as what a regulator would expect to see. And that will be because your values drive the organization.

 

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