The CIO's Role in Ethics & Customer Trust

Sara Peters, Editor in Chief | 3/15/2012 | 4 comments

Sara Peters
A Goldman Sachs executive resigned in outstandingly public fashion Wednesday and lambasted the investment bank in a zesty op-ed post in the New York Times. Greg Smith, who was Goldman Sachs' executive director and head of the US equity derivatives business in Europe, the Middle East, and Africa, wrote:

I can honestly say that the environment now is as toxic and destructive as I have ever seen it. To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money...
I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

Smith's op-ed has been covered, discussed, supported, dismissed, and mocked. There are certainly plenty of lessons to be learned from his actions and his words -- lessons about how to treat employees and customers, how to mentor young staff, how to broaden the definition of a disaster, and why you should incorporate public relations into your disaster recovery plan.

CIOs should give consideration to all those topics. However, in this piece, I'd like to talk about what this event might teach us about the CIO's responsibility when it comes to maintaining corporate ethics and customer trust.

Time and time again, I hear people on E2 and elsewhere say trust is fundamental to financial services. I confess that I smirk every time I hear it. There are different kinds of customer trust -- for example, trust that the company is keeping one's personal data secure and safe from prying eyes, and trust that the company is honestly working to improve one's personal finances.

Earning customers' trust by securing their personal data is obviously part of the CIO's job. And from the looks of it, financial services CIOs are doing a great job of this. Banks are often the first organizations to institute rigorous security practices and deploy cutting-edge security tools.

Customers of financial services trust those organizations to keep their personal data safe. However, as we've discussed before, the customers don't assume the organization is honestly serving their best interests. This is certainly how I feel personally. I don't fear banking online, but I do (perhaps unfairly) fear that all investment bankers follow the "greed is good" credo and aim to destroy me with bad advice and a million tiny fees. To hear Greg Smith tell it, this fear and mistrust is completely warranted.

It makes me ill how callously people [at Goldman] talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets.”

What role do you, the CIO, play in squashing that corporate culture and earning customers' trust honestly? Is it your job to look out for the customers' interests and ensure they're being treated ethically?

Yes. Absolutely.

Everyone in an organization -- those in leadership positions in particular -- should take ownership for ethics. The CIO is in a unique position to monitor and even enforce good ethics. Why? You know how data is being used and why, because you're the person setting up the systems. When setting up ways to process big data, you're getting insight into how your company is being run. You may see when customers throw more money into bad investments. You may be part of the internal conversations about how brokers want to manipulate information, and you may be asked to help. Should you step in? Should you raise your voice if you spot something unethical? Should you flatly refuse to help? Should you start instituting technology to monitor how this information is being manipulated by the staff?

During my career, I've seen IT staff respond to ethically questionable requests in different ways. I've seen some shift uncomfortably in their seat and then meekly comply. I've heard others decline requests and come to the defense of customers' privacy or expectations.

Is this more important to CIOs in financial services companies than to other organizations? Possibly. There's a lot of mistrust out there right now in financial services organizations -- as well there should be -- so customer trust is of paramount importance (except at Goldman Sachs, that is). However, ethics are a fundamental part of business and a fundamental part of life. All CIOs should consider it part of their job description.

View Comments: Newest First | Oldest First | Threaded View
impactnow   The CIO's Role in Ethics & Customer Trust   3/20/2012 11:27:55 AM
Re: Hissy Fit or Expose?

Sara you touch on a very salient issue too many don't realize how much access the IT department has to the data for the organization. I have worked in some sensitive businesses and was amazed at how easily employees could access sensitive information in client records. It's very scary. There really needs to be a mandate from the CIO on ethical procedures of data access and the checks and balances in place to bar everyone in IT from accessing sensitive data.

David Wagner   The CIO's Role in Ethics & Customer Trust   3/20/2012 12:06:21 AM
Re: Hissy Fit or Expose?
Sara- I generally agree with you, but unfortunately, people respond to the style as much as the messgae. They have certain expectations of the way certain people talk. I think unfortunately, some people have responded poorly to this just because they don't expect this kind of talk from someone like this. It matters more than it probably should.
Sara Peters   The CIO's Role in Ethics & Customer Trust   3/19/2012 12:14:33 PM
Re: Hissy Fit or Expose?
@Dave  I'm not going to argue that CIOs need to keep their cool. But sometimes somebody's got to stand up, speak up, be righteously indignant, and do their damnedest to put a stop to things. And why shouldn't a CIO fill that role? I'm calling this case an "expose" not a "hissy fit." 
David Wagner   The CIO's Role in Ethics & Customer Trust   3/16/2012 2:51:28 PM
Hissy Fit or Expose?
I do agree with you Sara that CIOs and the IT department in general have a great ability (and responsibility) to police ethics. The problem with the guy who inspired the article though is that he threw a big public fit as much as he exposed Goldman Sachs.

i know we're supposed to pay more attention to the message than the delivery.

But it is hard to take a professional seriously when he behaves unprofessionally.

It is much like the Jose Canseco situation in baseball. He told the truth but no one really believed him.

CIOs have a responsibility to police the ethics of their department and the organizaiton, but they also have to keep their cool.


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