Friday, 26 October 2018

The Ethical Corporation

When George Osborne took on various jobs after leaving politics few people imagined he was bringing rare skills to his new employers or that he was still motivated by public service. He was clearly trading on his influence and intent on making a lot of money by doing so. In contrast, the news that Nick Clegg has joined Facebook has prompted a plethora of comment focused on his own values and the company's need for greater ethical guidance. For example, Paddy Ashdown "has urged Nick Clegg to stand up for the values of liberalism and democracy at Facebook". Even those inclined to be more cynical about the company's objectives do so by regretting the compromise this entails for Clegg, as if disappointing supporters represented some sort of break from his career to date: "You're better than that, Nick", as Carole Cadwalladr put it. Perhaps the most bizarre (though perhaps only semi-serious) idea is that Clegg will act as Facebook's conscience: "Roman emperors used to employ a slave to whisper in their ear 'You too are mortal'. Zuckerberg may need that role and Clegg may be the person to deliver it".

Clegg has been hired to smooth Facebook's relationships with governments and regulators, specifically to mitigate the threat of legislation to the company's earnings and steer regulation towards its own interests. His utility is primarily in respect of the EU, where he previously worked as a trade negotiator and has many current contacts. The UK is already of minor interest to Facebook (recall Zuckerberg's unwillingness to appear before a select committee hearing) and will be of less interest after Brexit, hence there is little downside to recruiting someone who squandered his political capital and who would have zero leverage with a future government of any stripe. In the US he is largely unknown and superfluous in what remains a benign environment for technology businesses, though he may prove of some value as a less robotic deputy to Zuckerberg in appearances before legislators and there is an expectation that he will be a key player in "shifting corporate culture at a company whose founder announced earlier this year he would 'fix' it".

Clegg's recruitment is part of a wider corporate trend towards the appointment of Chief Ethical Officers. This is partly an admission that burying corporate social responsibility (CSR) within human resource, compliance or marketing functions is not an effective approach if you genuinely want to "shift corporate culture", and partly a recognition that reputational damage is a greater risk for businesses that manage consumer assets and thus rely on their sympathy. As these have grown over time with the expansion of financial services and the Internet, ethics has taken on a more important role in providing customer's with assurance about the safety of their assets, whether money or data. That Facebook's user base is ageing is no secret and most observers reckon the turn-off for the young is as much to do with the company's heavy-handedness and dubious exploitation of data as it is the heavy-handedness of intrusive parents or the excess of cat videos. In the circumstances, the choice of a "centrist dad" politician in the role isn't likely to make Facebook cool again, but it does mark a conscious political adjustment.

Conventional wisdom assumed that Silicon Valley was Democrat during the Bush and Obama years for no better reason than its use of progressive rhetoric. As its nature has become clearer, from restrictive employment terms through systematic surveillance to political donations, its Republican and libertarian spirit has become more visible. Politically, Clegg helps to provide a liberal sheen that Zuckerberg and his ilk imagine will restore Silicon Valley's bipartisan reputation (Clegg's Orange Book liberalism makes him mainstream Democrat). This cold calculation is still obscured by the media's desire to paint the industry's leaders as a breed apart: "As one ethical quandary after another has hit its profoundly ill-prepared executives, their once-pristine reputations have fallen like palm trees in a hurricane. These last two weeks alone show how tech is stumbling to react to big world issues armed with only bubble world skills". Employing someone from a different bubble, that of politics, isn't smart if you wish to engage with the "big world", but it makes a lot of sense if your primary concern is legislation.

Ever since the tech titans came to prominence there has been a tendency to treat them as a peculiar sub-species of capitalist, combining the unworldliness of the autistic nerd and the naïve enthusiasm of the teenage Randian. This ignores that a lack of ethical scruples is simply par for the course in big business. The leaders of Silicon Valley are not doing it for the lulz or trying to build a Utopia. They're just trying to make as much money as possible. The image of the industry leader as a man-child allows the apparent absence of ethics to be presented as a matter of maturation: young companies must grow and learn and we should forgive them the odd mistake along the way. But given that ethics is necessarily grounded in society, it is absurd to claim that an individual company, let alone an entire industry, can have emerged without an ethical system and that it needs to be taught right from wrong. Silicon Valley has ethics. It has values and norms. It's just that these aren't particularly attractive to wider society, grounded as they are in presumptions of elite entitlement.

A better approach may be to acknowledge this and seek to uncover and elucidate a company's ethics. Conventionally, this analytical role is fulfilled by a number of independent parties ranging from whistle-blowers through journalists to law enforcement. The problem with Silicon Valley is that the legal framework is formally supportive of whistle-blowers but in reality dedicated to protecting the corporation, while too many journalists have been compromised by the industry and law enforcement agencies have been generally reluctant to intervene. Tech's issue is not a lack of ethics but an insufficiency of invigilation and enforcement. Clegg's appointment is an attempt to keep it that way. The theatre of Zuckerberg's appearance before Congress, like Elon Musk's more recent antics over market-sensitive announcements, suggest that we are some way off Silicon Valley being treated anywhere near as rigorously as other, more established industries where there would be less tolerance for such "immaturity". As with the banks, if more technology business CEOs had been sent to jail for their abuse of power, we might not be debating the wisdom of injecting ethics into the industry.

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