Top technology firms wrote a joint letter on July 18 to U.S. President Barack Obama, top officials in his administration, and legislators in Congress pushing for greater transparency on Washington’s national security-related requests for user data.
The letter, signed by a who’s who of the technology world, including Apple, Google, Facebook, Microsoft, Twitter, LinkedIn and Yahoo!, follows media reporting of leaked documents claiming that the U.S. Government has, as part of a secret surveillance program called Prism, conducted very extensive data gathering of phone calls and internet usage.
Since the revelations, there has been concern expressed around the world, including from foreign governments, renewing the debate over the appropriate balance between national security and consumer privacy. Inevitably, this has put technology firms on the defensive with the classified Prism program reportedly preventing companies from revealing all the information on the surveillance requests they receive.
The episode underlines the blurring of traditional public and private sector concerns of public policy and corporate affairs, respectively, in sometimes thorny issues of political, human rights and/or legal issues. To be sure, this is not a new phenomenon by any means, but nonetheless appears to be increasing in incidence and salience. Partly, this is driven by globalization, and also the growth of key industries including new technology.
In the technology area, alone, firms have been caught in controversy on numerous occasions in recent years. For instance, during the revolution which overthrew Egyptian President Hosni Mubarak in 2011, some companies, including France Telecom, were forced by the regime to temporarily shut down their networks. Meanwhile, Google and Twitter collaborated on a ‘tweet to speak’ program which was used as a communications platform by some anti-Mubarak protestors.
To be clear, new technology firms are not alone in experiencing issues from working with diverse political authorities across the world. Indeed, internationally-focused companies in many other industries, ranging from energy and extractives, to fast moving consumer goods, have long been confronted with challenges too.
In this complex – sometimes uncharted – territory, firms (and indeed entire industries) can attract high profile scrutiny. For instance, Members of the European Parliament (MEPs) passed a resolution in February 2010, following the disputed Iranian presidential election of 2009, which called on EU institutions immediately to “ban the export of surveillance technology by European companies to governments and countries such as Iran”. In subsequent testimony to MEPs during a hearing on human rights and new information technologies in June 2010, Barry French of Nokia Siemens Networks reportedly said that “we absolutely do find ourselves in a tricky situation and need the help of people in this room to help us navigate in these challenging times”.
To be sure, various international codes of conduct, including the UN Guiding Principles on Business and Human Rights already exist and reinforce the corporate social responsibility practices of individual firms. However, some of the most enlightened companies have recognised the need for a more decisive shift toward what has been termed strategic “corporate foreign policy.”
Corporate foreign policy aligns a firm’s external affairs activity, including media relations, risk management, corporate social responsibility, government affairs, and operational planning, in a clear strategic framework. Recognizing the need for an unusual mix of core competences (e.g. in advanced diplomacy) in some of these corporate functions, capability (including tools, training and infrastructure) can be enhanced where any gaps exist.
Other example areas of capability where firms occasionally have gaps include foresight and horizon scanning (disciplines originally pioneered by Shell) to anticipate and plan for social, economic and political opportunities and threats. Firms may also need clearer internal guidance for determining decision-making, protecting stakeholders (including customers), and/or remaining faithful to corporate values, especially in fast-moving, unpredictable, crisis situations in countries with weak democratic credentials.
The relentless march of globalization, with the interconnections this brings, means that few international companies will escape these pressures completely. And, at the same time, owing to proliferation of media, and the influence of NGOs and related stakeholders, the actions of firms are increasingly under the microscope.
For those companies which are pro-active and invest in their capability, the prizes (both in terms of mitigating risk and seizing opportunity) are potentially ever more significant. Yet for those which misstep, the fallout can be increasingly damaging, both reputationally and also for the financial bottom-line.
Andrew Hammond is an Associate Partner at ReputationInc. He was formerly a UK Government Special Adviser, and Senior Consultant at Oxford Analytica.