Putting the Ethics in E-Business

As technology in general and the Internet in particular become a more important part of how virtually all companies do business, many are finding themselves faced with new ethical dilemmas.

Take for example when New York-based Internet advertising company DoubleClick Inc. made plans to share customer information with an off-line marketing firm last year. Consumer advocates were up in arms that DoubleClick would betray such "confidential" information. The controversy not only tarnished the company's name, but also raised a host of Internet privacy issues that e-commerce companies could no longer avoid.

When Toysmart.com Inc. pulled the plug on its operations this summer and offered its online customer list for sale, a similar situation arose. Regulators reacted by threatening to block any such sale because it would violate a privacy agreement with those customers.

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Ethics Consultant

• Name and title: Tom Shanks, ethics consultant

• Nature of work: In workshops and meetings, he advises executives on setting ethical guidelines for day-to-day business practices. He also meets with employees and conducts surveys to find out where the hurdles are in meeting guidelines.

• Skills required: Communication, training and facilitating skills are key, as a well as a theoretical background in ethics. Business knowledge is helpful, too. "At some point, you have to get real-world experience with how these things work in a business that has to make money," says Shanks.

• Training needed: Most ethicists come out of academia, says Shanks. Many begin with either a master's degree or a Ph.D. in philosophy, with an emphasis on ethics. Many business schools have begun offering ethics training as part of their MBA programs.

• Job and salary potential: Ethics consultants can earn as much as $5,000 to $8,000 per workshop at corporations, or $175,000 to $200,000 as full-time employees.

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Examples like these explain why some firms are hiring people like ethics consultant Tom Shanks. Some companies, such as insurance firms, have long relied on the advice of professional ethicists to sort out thorny ethical problems that, if not nipped in the bud, can cause legal and financial disasters later on. Now an increasing number of companies are seeking the expertise of a new brand of ethicist - one who can apply abstract principles to quickly changing technologies.

E-commerce firms, for example, might call on an ethicist like Shanks to help sort out issues like the ones that plagued DoubleClick: Just what limits should there be on how online businesses use the information they gather about their customers? And what responsibility do companies have to publicly disclose their data mining practices?

Or if a company is considering using software to monitor its employees' computer use, an ethicist can help gauge whether it's a legitimate way to ensure productivity or a violation of employees' privacy.

One thing is for sure: The Information Age will continue to pose new problems for experts like Shanks to grapple with.

Here's a look at Shanks' career and his insights into a burgeoning field.

Tom Shanks

Ethics consultant

Experience: Along with his work as an ethics consultant, Shanks is an associate professor at Santa Clara University in California, where he teaches courses in technology and society and engineering ethics. Shanks holds a Ph.D. in communications. At the university's Markkula Center for Applied Ethics, where he is a senior fellow, Shanks developed a system for ethical decision-making that became the basis for workshops he has led at a wide range of companies and nonprofit organizations.

Since he started ethics consulting in the early '90s, he's had plenty of experience dealing with the conundrums technology can create.

When a group in Santa Clara County, Calif., began pushing for software that would filter out provocative content on computers in public libraries, some feared that First Amendment rights were at stake.

"There was a major showdown," says Shanks, who was called in to make sure that all sides in the debate were heard, to assess how reasonable the filters actually were and to explore a range of solutions to the problem.

In the private sector, one of Shanks' major clients is financial services firm The Charles Schwab Corp. in San Francisco. With the support of the company's mission statement, which promises to provide customers "the most useful and ethical financial services in the world," Shanks has helped the company refine its customer relations practices as its online business grows.

Recently, Shanks has begun regular consulting at San Jose-based e-commerce applications vendor Propel Software Corp. Propel is Infoseek founder Steve Kirsch's fourth start-up company.

Kirsch, one of the best-known philanthropists in Silicon Valley, had already written a list of 12 "core values" to guide business practices at Propel before Shanks joined the company. The values included maxims like "give back to the community" and "play to win-win" - the notion that the company should strive to do business in such a way that all parties involved benefit.

Based on interviews with the company's 60 employees, Shanks suggested ways to refine the guidelines to make them more realistic. He continues to meet regularly with a "values committee," made up of 12 employees drawn from all levels of the company, to discuss how to put the core values into practice.

One of the main ethical problems in the e-commerce arena centers on the controversy over data mining - the selling of consumer information by e-commerce merchants to online advertisers. "If you're creating e-commerce applications and your customers want your product to have data mining capabilities, what is your responsibility?" asks Shanks. "That's the kind of thing we're sorting through."

Shanks says he hopes to find ways to help Propel curb the abuse of consumer information among its clients by offering incentives to respect end users' privacy and by providing them with up-to-date information about privacy legislation.

Challenges: The first challenge in working with his clients is forming a common language that employees can use to talk about ethical issues, Shanks says. And as deadlines near, ethical guidelines can end up on the back burner. This is especially true at fast-paced start-ups. "When there are 110 other things taking up people's time, there's some convincing that has to be done to show employees that they should be paying attention to ethics and values more than they are," explains Shanks.

Rewards: Shanks says ethics consultants can earn $5,000 to $8,000 per day for conducting workshops at corporations. Salaries for full-time ethics officers who are employees are approximately $175,000 to $200,000. He says he also has the satisfaction of influencing the direction of the companies he works for. "I'm helping people figure out how to treat other people better," he says.

Tobias is a freelance writer in Santa Cruz, Calif.

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