A timely and interesting article about the ethics of artificial intelligence (AI)

This paper has been written to consider how advances in artificial intelligence (AI) will affect the different roles in which people operate as members of society, members of a business and as individuals. It presents an overview of the ethical issues that need to be considered and, perhaps, enshrined in regulation as we embed AI and machine learning applications into our workplaces and our personal lives. It also seeks to explore how regulators have so far responded to AI’s advances and to identify some of the ethical questions the accounting profession, business in general and individuals need to ask as we engage with these new technologies.

To date, the media focus on AI and machine learning has been characterised by two extremes. The first focuses on the tremendous benefits AI can deliver to humankind, freeing us from workplace drudgery and enabling us to actualise our higher order skills. At the other extreme are warnings of robots coming to take over our jobs and a world of “big brother” surveillance emerging where our every mood and move will be monitored and analysed, the ensuing information used to manipulate us in ways not of our choosing.

The approach of this paper is to present a more holistic snapshot of this very fast-paced technological movement, to anticipate how these developments will affect our personal, social and workplace environments and foreshadow the ethical implications that need to be considered. To assist us in drafting this paper, we have interviewed key industry figures across Australia and New Zealand to gain their insights. Special acknowledgements go to Sarah Adam-Gedge CA, Professor Nicholas Agar, Lachlan McCalman, Antonio Papalia CA, Channa Wijesinghe FCA and Peter Williams FCA.

We suggest that, with the recent advances made in machine learning, we have arrived at an ethical crossroads where we need to determine the role AI will play in shaping our shared futures. Our immediate ethical challenge is to consider how best we can use AI to advance human well-being and how best we can prepare people for an AI world. We have a window of opportunity, to step back and purposely design an AI world that ushers in a more inclusive global society and economic system than exists today. If we fail to build the ethical dimension into each stage of our AI journey, an alternative route that perpetuates the current polarization of wealth and resources within and between societies seems inevitable. The academic world has put in place an ethics regime around research with humans which may be the appropriate starting point in considering the type of ethical framework necessary to guide ongoing AI developments. It is in everyone’s interest to ensure AI will take us to places where we want to go and that the journey will change us in ways that enable us to evolve and flourish as human beings.

Is there a Harvey Weinstein lurking in your organisation?

The speed with which countless Hollywood stars, directors and movie moguls have come out in little over a week to say they knew what was going on is beyond belief! They all knew, they said, but chose to keep quiet for a variety of reasons. It’s now inevitable that other names will appear as perpetrators of similar habitual harassment and abuse of women. Already, a hashtag #metoo has emerged for people who want to say ‘enough is enough’.

But is it enough? Outside of Hollywood, there have been many instances of such intolerable behaviour over the last few years, including here in Australia. Weinstein’s defence of “that was then, this is now” is pathetic.

Many people knew, could have known, should have known; should have said something. But the prevailing culture in many organisations is to ‘go along to get along’. A wide variety of rationalisations are used to justify silence: ”somebody else will surely say something”; “it’s not my role to handle HR issues”; “He’s a powerful man. How can I stand up to him?”; “They’re all the same; there’s too many of them”; and, “it’s been going on for so long and many people know about it, how’s it going to look if I speak up now?” We always have to focus on the impact such behaviour is having on the person at the centre of it, so it doesn’t matter when atten-tion is called to it. At least it stops.

Organisations have Codes of Conduct that expressly call out this sort of behaviour. Why do they not work; why do they not protect employees from this sort of gross behaviour? Because, regrettably, as we see in the Weinstein case, it starts in the executive suite where there is often a ‘cone of silence’ when it comes to uncon-scionable conduct. If leaders don’t hold each other accountable for poor behaviour, that tells people the sorts of behaviour they can get away with.

Failure at the top then signals to managers below, that they too can get away with bad behaviour. It’s the cause of many dysfunctional business cultures. It costs on the bottom line, and gives rise to low productivity, low innovation and lack of employee engagement Gallup. At its most fundamental, people don’t speak up because they don’t have the language – or skills and practice, or courage – to call out this sort of behaviour.

“Speak up” cultures have become the latest corporate desirable in the wake of regulator demands and stron-ger whistleblowing protection. However, little has been done so far to pave the way for such cultures to emerge. Speak-up aspirations are more akin to a corporate wish list. Let’s put it out there and somehow, magi-cally; it will happen. If only human behaviour were that simple.
However, there is an answer. The work of Mary Gentle and her Giving Voice to Values training shows it is possible; that it requires a new way of thinking and a new set of skills to make behaviour change easier. Techniques such as

  • Identifying your core values and ways in which you feel comfortable acting on them whether it’s by having one to one conversations or writing memos or gathering a coalition of like-minded people to address a values challenge
  • Building on the organisations ways of solving problems by reflecting on what’s worked in the past
  • Pre-script how you defend your values and be prepared when challenges present themselves
  • Rehearse with peers or mentors your strategies so you are well prepared
  • Speak for self and focus on behaviours. People will often dismiss inappropriate behaviour as a ‘one-off’ (having a bad day, etc.) but if you can point to several incidences they’ll know that it’s a pattern that’s been observed.

At its simplest, it means surfacing and building on the human dimension of business, the human relationships which are at the core of all business activity. It demands a new type of authenticity from leaders, one that seeks to eliminate the gap between what they say they value and how they go about living those values daily, including meeting the challenge of holding peers to account for their poor role modelling. It means looking inwards to identify how we have excused poor behaviour in the past and then rehearsing how to act better in those challenging situations that will inevitably come to light again.

In reality, most of the time, most of us do know what the right thing to do is. It’s not that its grey, it’s more that we don’t know a safe way of taking action and acting on our values. Instead of moralising, Mary Gentle’s techniques move the enquirer from simply reflecting on the issue to a focus on problem-solving and action.

If we truly wish to promote healthy workplace cultures, then leaders need to build the behavioural infrastruc-ture that enables healthy workplace relationships to emerge. A Code of Conduct is not enough to guide and maintain workplace behaviour standards. For too many, it’s become a case of “set and forget.” To be a living document the Code’s intent has to be supported by workplace learning opportunities that enable positive human relationships to flourish.

E-learning won’t do it. It’s not a cognitive task; when people know the right thing to do, they also need to know “how” they can do so safely, and that is an outstanding challenge for employees at every level in organi-sations today. It’s only by truly valuing your corporate values and supporting the sort of relationships they can enable or disable in the workplace, that will prevent a version of a Weinstein-style time bomb ticking away in your organisation.

Code of Conduct – a barrier to good conduct?

Gallup reports only 15% of employees are engaged at work today. Is your poorly designed Code of Conduct the start of this disengagement?

If you were to conduct a survey in your organisation with one single question, “Who has read the Code of Conduct?” how many people – employees, managers, senior executives – are likely to say, “yes”? The majority? A few? Hardly anyone? Our guess is hardly anyone and yet the Code of Conduct is possibly the most important document governing the organisation’s relationship with all its employees and safeguarding its reputation and social licence to operate!

For most organisations, especially publicly listed companies, those in the public sector and the larger not-for-profits, the Code of Conduct also enshrines the legal obligations both parties have to each other, the framework for how people can expect to be treated at work and the protections afforded to employees in the event of a breach.

Our experience suggests that Codes of Conduct often have little meaning for employees. They don’t understand its contents or how to apply its directions; they are not motivated to use it as it wasn’t designed with their needs in mind.

Typically, a Code of Conduct comes out of the legal department, and is written in ‘legalese’ – the complex version of English that lawyers need to use to make sure their documents can be defended in a court of law. Legalese is not readily understood by many employees who don’t understand its full implications and will likely never have recourse to the law. And yet, it’s presented to them on their first day in the workplace as a fait accompli and they’re told to just sign it.

Typically, they will sign a document that they haven’t had a chance to read and then the Code is not mentioned again until they do something wrong. Often its sole purpose is to reprimand employees for poor behaviour.

Is there a different way?

Our approach is to engage clients in first identifying what their Code’s objectives are and who it’s designed for. Is it there to serve the legal department, the HR department or the needs of employees? If its primary objective is to help employees know what is expected of them, then we need to start with their needs in mind.

What are the needs of the employee in understanding why their company or organisation has a Code of Conduct (and, hopefully, a Code of Ethics as well); how best can the leaders of the organisation design a Code’s content so that it resonates with employees’ needs and can be delivered in a style and format that into account the different learning styles and levels of comprehension that exist throughout most employee workforces.

Different levels of staff have different accountabilities and require different content styles and nuances while still being true to the spirit of the code. Each level of staff also requires examples of specific behaviours that will and will not represent the organisation’s standards.

For one organisation, we designed several different versions of training content to support the Code of Conduct’s intent for their different staff stakeholders and their unique spheres of influence. Each workshop was highly interactive, based on authentic workplace challenges that were able to resonate with people in different occupations, at different levels and coming from different demographic and psychographic backgrounds. Designing code of conduct training that has integrity with employees needs requires this sort of detailed nuancing if employees are to get past the go button of engagement. Authenticity and relevance to them and their situation is the first barrier that must be surmounted.

So, does your Code guide conduct, shape the context in which people work, give them a sense of purpose, or just sit on their employee file as a ticking performance time bomb?

This piece is an extract from a forthcoming book on how to make your Code work.

The moral compass – an anachronism in a digitally connected world

Why do the banks, and so many others, continue to get caught in the headlights of public scrutiny for unacceptable behaviour; why do they fail to satisfy the demands of the stakeholder economy and continue to get it wrong? Is it because they confuse ethics with morality? Morals are about how you, we, they define for themselves/ourselves what is right and wrong in a personal realm. What we have seen over many years is ‘good’ people doing ‘bad’ things and still believing themselves to be good people. And it’s simply no longer good enough. You are what you do, not what you think. Actions are what people judge you on; not your intentions but your behaviour. Business ethics, or institutional integrity, defines how the organisation, made up of all its people and its agencies, holds firm to a set of principles that are above the law and beyond the minimum. Cogent, potent statements of business ethics that are clearly understood, reinforced through how performance is measured and established as the cultural vein that carries the lifeblood of the organisation, ensure not that you get it right but that you don’t get it wrong.

Sadly, for many in business, ethics continues to be a grey area and something of a discretionary investment. Typically, organisations start from the assumption that most people want to do the right thing. However, ‘behaviour science’ shows us that this is not where organisational leaders should be starting from. The science shows that most people are not as ethical as they think they are; that they will find themselves compromising their values in certain contexts, or under certain pressures, and that they can remain blindsided to this slippage. Often, people operate on automatic pilot and simply go on what has gone before, copying the behaviour of their peers to fit in and taking short cuts because they assume they know what the context requires. This flies in the face of the obvious – that the world is continually changing in interconnected ways and most of us are powerless to shape the contexts in which we find ourselves. At work, we will be persuaded that the end justifies the means, the company needs us to do what’s necessary to make the figures, the customer can come first if that doesn’t get in the way of making targets or that it’ll all work out in the long run.

Leaders who continue to rely on the idea of “a moral compass” may themselves suffer from “bounded ethicality” arising from their failure to adopt a wider range of tools to equip themselves to identify and manage the ethical issues inherent in their business contexts.

Clearly what we need is a paradigm shift away from the moral philosopher’s focus with individual character and towards an understanding of the science of behaviour and its premise that, as employees, managers and leaders, we are essentially emotional beings that respond in irrational ways to the organisational contexts in which we find ourselves.

Business ethics are essentially about institutional integrity. Risk management needs to be re-classified as doing business ethically to protect the organisation by building a healthy culture that can risk-proof the enterprise. This new type of ethical accountability shifts the focus from individual character strengths or weakness, to the actions leaders take to design their organisational cultures.

Global regulators, including APRA, are warning Boards that behaviour in the workplace is a systemic source of financial, social and, environmental risk and they expect them to purposely manage the types of behaviour they promote.

Leading brands such as GE, 3M, Patagonia, Marks & Spencers, Avon or Starbucks show us how a consistent culture underpins business success and how it is essential to skill employees to respond to the contextual pressures they will inevitably face. Leaders play a major role by ensuring a zero tolerance for poor role modelling from the top. No matter which country they are in, the culture is the same. These organisations begin with a recognition that the leader’s role is to create an organisational context where employees are forewarned and forearmed about contextual pressures so that they can better respond to these in ways that do not comprise ethical standards.

Australia’s current cultural perspective of ethics as the preserve of individual morality sets the bar of acceptable business standards too low and keeps Board focus on compliance rather than addressing the ethical risks inherent in everyday business contexts.

Cultural and behavioural change is not an easy task. Enabling systems and processes, strong leadership, regular training and performance management, targeted engagement and communications are all critical to empowering people to think, feel and act in a way that builds a culture of integrity and respect.

It’s time to abandon reliance on “moral compasses” or hide behind notions of “greyness”. Employees know what ethical behaviour looks like; customers know it; regulators know it; and social scientists have known it for over 100 years.

It’s time to sacrifice a couple of finance people from the Board and replace them with social scientists and maybe, just maybe leaders will see the next ethical crisis coming before it decimates a hard won reputation!

Whistleblowing – too little too late?

A fundamental challenge for organisations is “how do we get our people to raise issues of concern because they recognise it’s good for them?” The simple answer is – make it safe for them to do so! The harder thing to do, and what most organisations struggle with, is to create and embed “speaking up” behaviour as the hallmark of a trust culture where raising issues is seen to benefit the whole enterprise and so is the natural thing do.

Instead, people must resort to ‘whistleblowing’ and yet whistleblowing systems continue to be poorly designed and embedded in culture reducing them to ‘an avenue of last resort’ for desperate employees witnessing systemic corruption. It is because of the prevalence of poor cultural management practices that regulators insist whistleblowing mechanism form an essential part of good risk management practice today. Where leaders fail to promote a facilitating business culture, managers in turn fail to regularly tune into and respond to ongoing employee feedback. EY’s 2017 Asia-Pacific Fraud Survey found that 49% of respondents think that their senior management would ignore unethical behaviour to achieve corporate revenue targets while 51% of senior management respondents feel under pressure to withhold information about misconduct. This absence of an effective two-way communications avenue between those at the top of organisations and those at the bottom creates the ongoing need for whistleblowing systems (we must find a better way of describing them.) Employees find themselves resorting to “whistleblowing” out of desperation rather than genuine concern to safeguard business standards for all.

Paradoxically, the reasons why they fail are the same reasons they need to exist. They fail because of the absence of leaders’ intent to formally manage organisational culture as it exists and emerges. In its absence, unaddressed barriers to the success of a “speak up” culture emerging prevail. Organisational barriers include dysfunctional power dynamics; information silos; low employee engagement and unrecognised and unmanaged risks. They also fail because of a profound lack of understanding of the incremental nature of how unethical behaviour emerges and flourishes; how it becomes” normalised” and how the barrel itself goes bad.

At their basest, organisations are political entities characterised by asymmetrical power and information biases; politics and self- serving dispositions; poor interpersonal skills and emotional maturity; jostling egos and bullying predispositions; ethical fading and, sometimes, some of the most creative rationalisations imaginable for all sorts of self-interested actions.

Unless the organisation has a purposely designed workplace culture, where behaviour standards are reinforced daily and where employees are encouraged and rewarded for “speaking up”, it can place itself at the lower end of a continuum – away from a sustainable inclusive culture and towards a low trust, power-based culture where employees protect themselves rather than speak out about the unethical behaviour they see around them.

Whistleblowing systems also fail because employees rarely understand or receive timely information about how this essential risk management system works, or “why” it was designed in the first place i.e. to ensure managers, especially middle managers, play their designated roles in building a culture of integrity aligned to their code of conduct accountabilities. EY’s 2017 Asia-Pacific Fraud Survey found that 1 in 4 respondents say their colleagues are aware but do not report fraudulent activities because they do not have confidence in their organisation to protect them if they report misconduct. Perhaps most alarming for corporate leaders is that 1 in 5 respondents would rather take a whistle-blower report direct to law enforcement.

Typically, whistleblowing hotlines are housed within the compliance department where the focus is often about “sign and comply” as opposed to “engage and defend” the organisational values and standards. This compartmentalisation of “speak up” mechanisms often makes it ‘somebody else’s problem. HR functions can safely lock that away, tick that box and only must deal with the outfall when, as often happens, they must manage someone out of the organisation. Sadly, all too often, it’s the whistle-blower themselves.

A dominant organisational “too busy” mindset precludes ongoing reflection on systems that have become outdated, broken or dysfunctional or canvassing what ‘innovation’ in this area might look like. So, too, organisational members are deprived of any opportunity to co-design and collaborate in designing a essentially helpline system that will enable them to provide early warnings of people, processes or systems under stress.

On the positive side, behaviour ethics provides organisational leaders with the tools to forewarn and forearm their employees so they can be alert to the incremental nature of unethical patterns of behaviour and how to spot early warning signals that they may be on the slippery slope. Drawing on the field research from this science encourages an entirely different approach to ethics training. This approach does not depend on the existence of “moral compasses” prevailing in our essentially secular society, but seeks to build the required set of social and psychological skills that employees need to develop to navigate the political nature of modern workplaces.

In an age of hyper-connectivity, where information and data is increasingly beyond the control of most businesses, isn’t it time that we got our own house in order? We need to build a “speak up” culture from the ground floor up. It begins with skilling employees to face the challenges they will inevitably face and build the right attitudes at every level to enable issues and concerns to be heard and, feedback given, on a timely basis. It requires leaders to motivate, reward, manage and measure things that matter – the human footprint on which all business is built; the zeitgeist that is constructed on a minute-by-minute basis. It requires a purposely designed culture that makes it easy for its members to do the right thing even when business pressures necessitate that this becomes “a conscious choice.”

Depending on whistleblowing is too little, too late. If we value our people, our reputations and our the wellbeing of the societies in which we operate, then we need to be measuring the strength of our organisational feedback systems on culture – the employee’s experience of the organisation in both its strong and weak dimensions and then we need to act on it so that a speak up culture can offset the need to resort to anonymous whistleblowing lines. Build a speak up culture, a high trust culture, a culture where people are rewarded for improving performance and highlighting threats to that performance and, we may begin to build a culture of collaboration for excellence instead of one of winners and losers where retaliation, isolation and distrust prevail.

Are traditional notions of professional ethical accountability too self-serving?

Speaking at a forum recently I was interested to be invited to comment on “the ephemeral nature” of values as they relate to the professions.

I was somewhat taken aback at the adjective “ephemeral”. Values have never been ephemeral. In fact, they have been very consistent throughout time and throughout different moralities. They continue to revolve around notions of being fair and honest with others; showing respect and avoiding harming others and refraining from doing to others what you would dislike having done to you. The ethical dimension of all human behaviour is this interconnectedness and interdependence with others, and our capacity to positively or negatively impact on the wellbeing of others.

While today’s business and political leaders have gone quiet on these higher order values, civil society and grass roots leadership can be seen to be filling the void.

There are many sorts of interdependence between corporate and professional well-being and others’ well-being. In fact, risk management experts warn that the traditional priority given to the impact of economic and legal risks on a business, or profession, is steadily giving way to emerging social and environmental risks. The growing number of high profile instances of companies failing to anticipate and respond to their inherent social and environmental risks, has demonstrated their latent power to adversely impact societies. There is no longer any doubt that business has impacts way beyond its economic footprint, be it the environmental degradation attributed to the mining industry, catastrophic oil spills such as BP’s in the Gulf of Mexico or the destabilisation of whole societies because of the GFC.

Civil society’s activists are now demanding a much broader and more transparent accountability from businesses and those that serve them. This much broader agenda of corporate reform has been gathering momentum ever since the GFC and the apparent inability of both business and political leaders to protect society’s interests.

Since then we have seen the emergence of The Guiding Principles on Business & Human Rights (2011) which stipulates that corporate responsibility to respect human rights ‘means that companies should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved’. The 2013 EU Accounting and Transparency Directives require European companies to report payments of more than €100,000 made to the government in the country in which they are operating, including taxes levied on their income, production or profits, royalties, and license fees. More recently the UK Bribery Act 2010, the UK Modern Slavery Act 2015 and the Criminal Finances Act 2017 have raised expectations of a much more proactive role being played by corporates.

The Australian Securities & Investments Commission (ASIC) has also put public trust and consumer protection at the heart of its work. Activities that contribute to these aims, such as formally managing the types of organisational cultures that lead to risky business decisions, are being encouraged by the regulator to safeguard against the concept of conduct risk as it adversely impacts consumers.

Industry initiatives, too, are emerging as part of a trend towards public and private regulation designed to raise the ethical floor below the global marketplace. For example, The Fair Trade movement, The Extractive Industries Transparency Initiative and Kimberly Diamond Certification process.

This evolving world order of cyber connectivity has brought with it a heightened recognition of human interconnectedness and the fragility of the global commons. This in turn is challenging current business success models and reshaping the roles and accountabilities of the professionals that service the corporate world. Ethical accountability extends beyond the letter of the law. Increasingly society is intolerant of those who try to hide behind their strict legal obligations as demonstrated by the James Hardie case here in Australia and, more recently, the backlash against high profile brand names found not to be paying their “fair share” of corporate taxes.

The accountancy profession has already moved on the perceived need to go beyond traditional notions of accountability. Accountants now recognise they can play a significant role in “protecting the common good” and have been engaged in thinking and developing more effective tools to guide their professional relationships with clients and others because of these undisputed interdependencies. The Accounting Professional & Ethical Standards Board (APESB) has issued a new standard, effective on 1 January 2018, that requires accountants to consider their obligations if they uncover or suspect illegal acts such as fraud, corruption, bribery or money laundering, and permits them to set aside the principle of confidentiality where illegal acts are suspected. APESB has identified a process to go through that enables accountants to raise concerns appropriately without breaching other professional and ethical standards. As Nicola Roxon, chair of the APESB, commenting on the need to change, noted, “It is feared that, in the past, identifying potential illegal acts and raising the alarm did not always prevail over confidentiality and other obligations to a client or employer.”

In-house lawyers, as well as commercial legal firms acting as advisers, have also increasingly been held to account for the roles they played or failed to play in many of the recent corporate scandals such as at GM, Barclay’s Libor rate fixing scandal and the News of the World phone hacking scandal.

All connected to the business world – legal firms, accountancy firms as well as general business firms – are being required to consider the impacts on all stakeholders, internal and external, because of the more visible interdependence. Anyone doing business transnationally is well aware of the risks inherent from any unethical activity occurring in its supply chain. As more and faster global communications are made possible, reputations are increasingly vulnerable to previously uncanvassed and unanticipated social accountabilities and outrage at any sort of exploitation or unacceptable conduct in the pursuit of success.

No profession can afford to ignore the ethical dimension of the work they do, nor their opportunity to choose a course of action that minimises potential negative impacts on society. The legal profession in particular has forever held itself to high standards, as the protector and enabler of the’ rule of law’. They have created the legal framework that underpins civil society but that society’s standards have changed, have gone higher, have erased the line between being legally right and ethically wrong. Do lawmakers need to introduce new mechanisms that will allow lawyers to balance what’s right by the court and what’s right by society?