Data Ethics: Doing the Right Thing with Data

By Tadewald, Jim | Strategic Finance, June 2019 | Go to article overview

Data Ethics: Doing the Right Thing with Data


Tadewald, Jim, Strategic Finance


Changes in legislation will always trigger organizations to review their current ethical guidelines and strategic governance profile. Today, this consists of data ethics.

As companies assess the consequences of new data privacy legislation, they should also review and recalibrate their data ethics guidelines. This includes addressing how to manage financial and accounting metadata, work papers, and electronic reports in core information technology information systems, as well as the storage location of this data, to meet these new legislative requirements. In addition, it means gauging whether the company's data policies are in line with its overall ethical guidance. Management accounting and finance departments are integral in gathering these facts and answering core ethical questions related to data management and security.

A data-readiness assessment for present-day data privacy compliance should include a review of the organization's current data governance process, inventory and mapping of data at rest or in transit, data privacy's impact on new products and services, data usage by third parties, data consent and transparency policies and procedures, and incident response and data breach notifications.

These efforts will often raise ethical concerns. The organization will need to make ethical decisions once data compliance gaps are identified or residual risk exceeds the organization's level of risk tolerance.

Does the customer really care how data is used? Should I accept the legal risk? Is it too expensive to meet the requirements of data privacy laws? We will never be audited by a foreign regulatory agency, so why change our policies or invest in additional compliance controls? Should we take a risk-based approach in determining what data management processes are most critical?

DATA ETHICS IN PROGRESS

Most organizations are establishing or revamping their data compliance models. Academics, senior management executives, and compliance professionals are developing new, comprehensive data compliance methodologies and data ethics guidelines. Top law schools and legal institutes are addressing data ethics with new thought leadership and recommendations for how to resolve data privacy and protection dilemmas. It's important for organizations and society as a whole to start viewing data ethics from a more mature modeling perspective than what has been acceptable previously.

Data compliance models and data ethics policies should be developed to incorporate a universal review of new legislation leveraging commonality amongst the worldwide legislation that's been enacted. Data ethics policies should be universalized at the enterprise level and not compartmentalized.

Data ethics is all about doing the right thing with data. With that in mind, there are four primary questions that management accountants and finance professionals should be asking to better understand data ethics within their organization:

1. Is the data usage process in line with customers' expectations? Is business data being used in a way that customers can trust is proper? Is customer data being tagged, linked, monitored, and sold without customers' knowledge? Is the usage of that data beyond the needs or requirements of the organization's business model and services? Is data being used in a trustworthy manner?

2. Will the data usage process be lawful? Is your organization following data privacy and protection laws applicable to every business location in which it operates? This should include understanding data usage compliance requirements and identifying any gaps that must be filled to meet those requirements. …

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