Image titleThroughout history, major industrial shifts have prompted an examination of the practical and ethical impacts of technological advancements on how people live, how society develops, how systems work and how economic value is created. At the dawn of the Fourth Industrial Revolution, the world finds itself in such a transition; resulting both from technology and the increasing challenges associated with sustainable development.

This transition has significant implications on both management and capital as expectations from stakeholders change, the speed and scale of corporate impact increases, and laws and regulation try and stay abreast.

Corporations and investors have wrestled with issues of technological transformation before, but the nature of the fourth industrial revolution and its global context makes it uniquely challenging. Underlying trends include:

  • Interconnectedness: as the interconnectedness of global business models and value chains increase, so does the societal, political and environmental impact of those decisions. Corporations and Investors will increasingly operate in a world where the ethical dimensions of their choices reach further and have greater potential impact;
  • Transparency: with the world more connected now than ever, uninterrupted information flows bringing to light the consequences of corporate, investor and individual decisions almost instantly, allowing society to discuss and act on their moral and ethical aspects in “real-time”. Transparency means increased external impact goes hand in hand with stakeholders’ perceptions;
  • Computational decision making: algorithm-directed operations generate their greatest value not by supporting human choice and behavior, but by taking people out of the decision/action loop entirely. In ethical, as well as practical, terms, this is entirely new terrain, unprecedented and uncomfortable, making proper assessment of impact and therefore implications for businesses difficult, whilst potentially enlarging that impact enormously.


It’s clear that the circle of responsibility that a corporate needs to consider is ever increasing, and that the nature of that responsibility and how it is managed is increasingly important. But this is uncharted territory for all: it’s not as easy as assessing impact, evaluating that impact on commonly understood criteria and acting accordingly.

This does not exonerate business, but increases the need to continuously inquire into the ethical dimension of their decisions: are actions that are now technically and legally possible bad or wrong to do? What principles of fairness should govern who gets access to critical, but scarce, resources or education or economic benefits? Who should be responsible? Who should be accountable? Who should bear the pain and the risk? And what – if anything – should be done to help those who are harmed or whose jobs are lost?

In this world, managers will either get their arms around such challenges and capitalize on the associated opportunities or will fail to do so, finding themselves either:

  • Miscalculating the risks associated with the magnitude and complexity of the effects of their decisions on society, economic activity and the way this influences their stakeholders; or
  • Capitalizing on technological advancements in a way that demonstrably reflects their broader impact; creating sustainable shareholder value based on public trust as much as on efficient business practices.

Accordingly, in its Task Force session on Ethics, Deloitte will focus on:

  • Are the ethical expectations of business really different now? Why?
  • What are the key risks and opportunities?
  • What practical advice do we have for both managers and investors?
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