The importance of digital governance for global companies

EthicsGrade’s latest quarterly ratings reveal that fewer than one third score a C or above for implementing good governance in their technology in 2022.

Only 89 of the 302 companies graded achieved this score or above, with many companies failing to provide details on their technology governance and artificial intelligence (AI) ethics.

Charles Radclyffe, CEO of EthicsGrade, said: “It is increasingly important for companies to integrate ethical principles in their digital transition, and to ensure such transition is appropriately monitored and governed.

“This is apparent to all stakeholders, and investors are increasingly looking to see it fully embedded in ESG strategies and reporting requirements. Examples of this include initiatives being established since the publication of draft EU regulations on AI in April 2021 which are due to be finalised later this year. Many companies will need to be much better prepared.”

EthicsGrade’s research shows only a handful of companies, including Microsoft and Deutsche Telekom, have achieved an A rating from metrics covering public policy, technical barriers to trust, ethical risk, data privacy and sustainability.

Perhaps more worrying is that only three companies have improved their score over the past quarter. They were Chinese smartphone manufacturer Xiaomi (up to B from D), IBM (up to B from C) and Instagram (up to C from D).

Xiaomi was caught up in consumer protection scandals in 2020 and 2021. Its improved rating follows an independent audit by TRUSTe which validated it as consistent with regulatory expectations and standards for privacy accountability in February 2022.

It went further in April 2022, by increasing transparency for its data protection architecture with the publication of security and privacy white papers.