Whether it is the collapse of a well known jewellers when the CEO’s flippant joke about doing a good job selling ‘crap’ was recorded on an employee’s smart phone, or the severe reputational damage caused when a CEO’s advice to employees to ‘grow up’ (eloquently offered between swigs of beer) was witnessed via webcast and shared across the web and National news, we can all think of incidents where the misconduct of employees has had disastrous effects on a company’s reputation and operations. These kind of organisation annihilating incidents are often collectively blamed on mismanagement of People or Conduct Risk.

Over the past few years, particularly since the economic crisis and popularisation of the Digital Age, many companies have been working diligently to develop policies that limit their People and Conduct Risk. However, despite strategies and tick box exercises to mitigate against these risks, companies continue to be struck down by the actions of people – their own and external observers.

This must beg the question, why are people and their conduct still a risk?

In terms of Conduct Risk, there has been a lot done in the Financial Sector. The FSA has defined principles around ‘Treating Customers Fairly’. The definitions are clear and the principle of putting customers at the heart of it all sounds sensible. Off the back of this, many conscientious companies have put Risk Frameworks in place. However, in practice, how do you make this work? Frameworks may lay out policies, procedures and roles on paper and even give a company a number of lines of defence against behaviour in the office. How though, does this translate into controlling or influencing employee and customer behaviour online? Given that the majority of banking and the majority of information sharing now happens online, how critical is digital risk and how can we protect ourselves against it?

As we can see in the examples above, commonplace digital tools like smart phone cameras and recording equipment, lethally teamed up with easily accessed social media sites such as blogs and YouTube can be weapons of organisational destruction when wielded by individuals who want to damage an organisation’s reputation or IP integrity. The Digital Beast of social media and normalcy of handheld media equipment are not going to disappear and indeed, given the many positive applications, we would not want them to. So, how do we ensure a happy ending to this story?

The beauty of Digital is that it is very much a double-edged sword. 

At Capgemini, we think that the digital beast can be tamed by employing an arsenal of appropriately tailored digital tools through your Conduct and People Risk framework. Tools such as Insight into action, the social listening tool that tracks and analyses social media for any references to the company so it can take action early to diffuse any potentially contentious chatter before it escalates (the tool has an output of recommended actions based on propensity modelling, kind of like predicting the future and countering it early if it looks likely to be dark), Solanis – a tool that locks down documents once they are digitally signed so the original version is set in digital stone or Backtrack – a tool that reduces the risks around new product launches and drives compliance when auditing FS back catalogues.

We can tackle the ominous Conduct and People Risk demon with a fresh perspective and approach. By mastering and taming our own powerful digital force, we can plug the gaping holes that have left companies so direly exposed to date.