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Leading digital platforms requires ethical leadership

Carol Robertson

In addition to legislation, ethical engagement by CEOs is essential to avoid accusations of unethical practice.

Digital platform businesses need to manage their ethics better, argue David De Cremer, Jess Zhang and Leander De Schutter, writing for The European Business Review.

At the moment, there is a lack of responsible leadership and regulation around digital platforms, which has resulted in a whole host of unethical consequences.

Companies such as Amazon, Apple, PayPal, Alibaba and Airbnb employ the latest technology and achieve growth by “creating new value and a greater level of well-being for a variety of stakeholders”. They are all interested in platforms that enable value creating interactions between different parties. Their use of the digital economy allows them to become both cheaper and more efficient. Digital platforms deal in information exchange, and information is power. But, the authors ask, “is ethics managed well in this digital economy age”?


The problem is that the focus of these digital platform companies is on the product itself, and they fall shy of regulating any long term societal effects. They embrace a form of Adam Smith’s ‘invisible hand’ wherein the companies produce the product and leave the platform user to sort out the regulation of it.

Unfortunately, as the financial crisis revealed, Smith’s invisible hand doesn’t really exist. So when, inevitably, there are unethical consequences of adopting this approach, the participating companies leave themselves open to accusations of unethical practice.

Two examples of this were seen with Facebook in the US, and Baidu in China.

1) Facebook – When false messages were distributed on Facebook that some claimed had influenced the US presidential elections, CE Mark Zuckerberg denied the power of the platform to influence something so grand as an election, and he downplayed the presence of fake news.

2) Baidu – A Chinese student underwent cancer treatment he found advertised on Baidu. The treatment was allegedly based on research supported by a leading US university. It wasn’t, and he died, and for a whole month Mr Li YanHong, Baidu’s CEO, didn’t give any response to the accusation that Baidu should have regulated its advertising, and only did so after extreme public pressure had been applied.

Neither of these companies’ owners took responsibility for the regulation of their platforms, demonstrating a lack of responsible leadership.


Many have called for better regulation of the digitised economy, and this is needed. However, it is not enough. Getting legislation passed is a long drawn-out process, and it won’t be able to keep up with the pace of change of a digital platform. Alongside legislation we need full ethical engagement by the company owners. We need leadership that puts ethical considerations at the very heart of any digital development. In other words, we need ethical leadership.


Platforms are, by their very nature, open. Therefore, the companies must take responsibility for setting the conditions for the rules of play. If you are operating from a digital platform, here are five ways in which you can increase your company’s ethical leadership.

1) Create a balance. Complying with laws and regulations should be taken as a given, and won’t do much to grow your reputation. However, your consumers will have other ethical concerns, and meeting these will demonstrate your convincing commitment to them.

2) Be consistent. Apply the company’s ethical stance consistently across all company channels. Failure to do so will make your company look insincere and unreliable.

3) Build trust. New technologies can be disruptive and you need to make your customer feel safe. To achieve this, focus both on fostering customer loyalty for your products, and on only using information that you have verified as being true. If you tell a customer one thing and they try the product and discover this not to be the case, you will have lost both their trust and their loyalty.

4) Embrace collaboration. Use the power of the collaborative structure of your company’s platform community to build trust between your product and your customer. What others say might matter more than what you say, and your platform community is your ticket to achieving growth and competitiveness.

5) Facilitate and coordinate. If your company platform grows too big, send in advisors to facilitate and coordinate.This larger community you have created will not be able to self-regulate.

Digital platform CEOs require leadership that sees ethics as intrinsically connected with any digital innovation implementation, and who have the foresight to predict ethical consequences.

Source Article: The Challenge Of Leading Digital Platforms In Responsible Ways
Author(s): David De Cremer, Jess Zhang and Leander De Schutter