Environmental, Social & Governance Briefs

How CEOs and Boards Can Enhance Digital Trust

April 04, 2023

10 Steps Boards Can Affirmatively Take to Establish Trust In Their Responsible Data Stewardship

By

Dominique Shelton Leipzig, Isabelle Sharon, Dr. Lori Esposito Murray, Paul Washington, Byron Loflin, Chris Hetner, Steven Roycroft

Boards have a governance obligation that increasingly extends to responsible data leadership. Whether it is guiding the enterprise through the adoption of generative AI, robotics, or new technologies that have yet to be discovered, the stakes could not be higher for boards’ obligation to remain current.

On Friday, March 31, 2023, approximately 60 CEOs, Board Members and other business leaders from across the country convened at the inaugural Digital Trust Summit. The Summit, hosted at the Watson Institute at Brown University, was an invitation-only private event cosponsored by The Conference Board, NASDAQ, Bank of America and Mayer Brown. Leaders such as Brian Moynihan, CEO of Bank of America, met under Chatham House Rules to explore ways to enhance trust in emerging digital technologies like generative AI, through CEO and board level leadership. It was particularly fitting for the in-person event to be hosted at the Watson Institute, given that it was named after Thomas Watson, the founder of IBM, and the Institute seeks to promote a just and peaceful world through research, teaching and public engagement. Brown University professors Suresh Venkatasubramanian, co-author of the AI Bill of Rights, and another leading expert on generative AI, added to the discussion, highlighting the importance of innovating beneficially and successfully, while building systems that are safe and known to be so. This will ensure the systems are shaped to us, rather than us being shaped to the systems.

Without trust, innovation cannot thrive. A recent survey of 200 business leaders conducted by The Conference Board found that trust was consistently held as the key to success in businesses’ transitions to stakeholder capitalism^[1]. The leaders at our Digital Trust Summit agreed, and emphasized that these are conversations that belong in the boardroom and with the CEO. The fundamental role of the board—managing risks, overseeing strategy, and protecting the brand—does not change with AI and emerging technologies. But every company is a digital company, and companies with more trust have better performance in terms of income, employee productivity, and customer loyalty. It is critical, therefore, that CEOs and boards proactively engage with the opportunities posed by emerging technologies and digital trust. A recent MIT study determined that CEOs that engaged in cybersecurity were 85% less likely to suffer data breaches.^[2] In 2022, NASDAQ listed companies that may not have addressed digital trust at the CEO and Board level, lost over $1.4 trillion due to data privacy.^[3]  On the other hand, companies that made data trust a brand differentiator are excelling in the marketplace.^[4] 

Below are 10 insights from panelists at the conference—steps CEOs and board members can take to help their company establish itself as a trusted leader in the digital world.

1. Appreciate that trust with data is at the core of your business success. As Brian Moynihan stated: “Financial services institutions are based on trust. We hold it. We help people engage with the economy. With that trust, we are able to provide great capability to our customers in the digital space.”
2. Prioritize technological understanding. It is critical that the board has access to people, inside or outside the company, with the bandwidth and sophistication to advise on technological opportunities and risks. Understanding those threats that can introduce material business, operational and financial harm is a cornerstone towards informing risk mitigation strategies.
3. Embrace technology responsibly and iteratively. Listen to your customers, learn from experts, learn from the adaptation of technology advances over the past several decades, adapt for your needs, and reinvent as circumstances change. Test technological systems for security, accuracy and fairness before, during, and after deployment.
4. Promote fairness within technological systems by having transparent discussions and relentlessly testing so that AI reflects our ideals, not our current imperfections.
5. Diversify the talent that is building and adapting technological systems. Ensuring these teams are not monolithic will have a huge, positive impact on fairness and equity.
6. Establish trust principles and embed them throughout the organization. These should touch on the four components of trust—empathy, transparency, capability, and reliability—and will ensure cohesion and consistency in a trust strategy.
7. Scale the speed of trust. Identify ‘mavens’ within the company, but not necessarily leadership, who can act as nexus points to scale trust both inside and outside the company. This will help trust move faster and permeate better.
8. Leverage public-private partnerships. Collaborate with government to combine private sector information and public sector authority to advance the interests of both, with regards to advanced technology adaptation and cyber security risk and resilience.
9. Incorporate national security principles into enterprise risk assessment. US companies are not seen as neutral parties by US adversaries, and will be targeted accordingly.  Practice crisis tabletop exercises and prepare for Grey Swans—events that are unlikely, but have significant negative consequences.
10. “Conduct scenario planning and crisis tabletop exercises to prepare for and anticipate responses to events that are unlikely, but that can range from moderately impactful to significant negative consequences” as Byron Loflin Head of NASDAQ Board Advisory division noted.”

CEOs and board members need not be experts in emerging technology, but it is critical that they understand the impact of technology and trust on business success, and prioritize trust through the responsible and equitable integration of technology into the company. Responsibility can be delegated, but accountability cannot. Boards are ultimately accountable for the company’s digital trustworthiness and business success, and should therefore take the lead in establishing the culture and strategy necessary to do so.

Dominique Shelton Leipzig, leader of Mayer Brown’s Global Data Innovation, dedicated to providing C-Level and Board level advisory counseling for data, and the Digital Trust Summit Leader stated: “We are thrilled to see the business community’s dedication to digital trust.  The fact that CEOs and Board Members dropped their regular schedules to convene at the Watson Institute at Brown to hold a thoughtful discussion about data leadership and trust is inspiring.”  Dr. Lori Esposito Murray, the President of the Committee for Economic Development of the Conference Board, and co-sponsor of the Digital Trust Summit event agreed: “AI’s rapid acceleration has heightened the urgency around data privacy and data security—issues that demand bold, collaborative leadership from the US Business and policy communities. Our studies confirm that the number one issue of interest for CEOs and Board Members as they face the evolving landscape is trust.  We are deeply committed to supporting this ongoing initiative.”

Digital Trust is an ongoing conversation, and the Watson Institute, The Conference Board, NASDAQ, Bank of America and Mayer Brown are proud to announce that the second annual Digital Trust Summit will be held at Brown University on March 28, 2024.