Social Strategy 140: Direct Action #Risk...

Twitter real-time direct action (DA) "Information Warfare" between nation states is a daily task. Current and future Operational Risk Management (ORM) priorities will encompass the imperative to staff "Corporate Intelligence Unit" Fusion Centers.

A prudent Operational Risk strategy, shall include a "Big Data" capability combined with deep social intelligence analysis. Here is a historical FLASHBACK in time, to one example of why leadership is devoting new resources and investment to these internal risk management capabilities:

New Diplomatic Avenue Emerges, in 140-Character Bursts
By SOMINI SENGUPTA October 3, 2013

UNITED NATIONS — "Countries all over the world, dictatorships and democracies alike, have in the last few years sought to tame — or plug entirely — that real-time fire hose of public opinion known as Twitter. 

But on the sidelines of the General Assembly meeting over the last couple of weeks, ministers, ambassadors and heads of state of all sorts, including those who have tussled with Twitter the company, seized on Twitter the social network to spin and spread their message. 

At the height of the diplomatic negotiations last week over a United Nations Security Council resolution that would require Syria to turn over its stockpile of chemical weapons, the American ambassador to the United Nations, Samantha Power, used Twitter to preempt criticism of the measure as lacking teeth because it had no automatic enforcement provision."

What does this mean for the global enterprise, who circumnavigates the planet to initiate and manage daily business operations?  It means that "Information Warfare" and intelligence collection and analysis for the enterprise continues, as a top strategic and operational function.  It requires continuous Operational Risk strategy oversight.

How an organization directs personnel and manages daily decisions, is more mobile information-centric than ever before.  Just stand at any major sidewalk intersection in a major city across the world and count the number of people looking at their "Smart Phones" as they cross the street.

The speed of business that is fueled by leaders commenting via social media, can even influence commodity traders in futures markets and operational planners in the "E-ring."

Leadership has the ability to by-pass the traditional media juggernauts to get their message heard in seconds.   The President of a major stock exchange or of a G20,  has a "Duty of Care" to it's constituents to make the correct public decisions.  At the same time, a moral and ethical context begins to evolve, in the vast battle space of 140 digital characters.

The use of a social media post or Tweet from the Board Room to the Court Room; from San Francisco to Tehran, or from Wall Street to Hong Kong, is a risk-oriented asymmetric information tactic delivered in plain sight.

Those social tactics, visual in the landscape of our modern day quest for influence, notoriety or outcry, shall forever shape the breadth of our enterprise digital risk management spectrum...

Duty of Care: Board of Directors OPS Risk...

The Board Rooms across America are in full tilt mode working hard on risk oversight. The Chairman of the Board (COB), is wrestling with divergent personalities and competing agendas as the organization races towards its next phase of growth.

Operational Risks are being presented from all facets of the business and the Board of Directors has a fiduciary responsibility to address them, without creating new risk in the process. Leadership is in short supply and collaboration among the entire board is dwindling. In terms of Operational Risk Management (ORM), what risk is the most dangerous to the enterprise at this point in time?

The risk that the Chairman of Board has lost their ability to forge trust and a favorable relationship with the Directors themselves becomes a significant threat. The trust and the relationship that a Chairman has with the Board of Directors is paramount. When this is no longer present, and the "Independent Directors" realize they can no longer trust the performance of the Chairman, significant risk factors begin to quickly evolve that puts the entire organization into a vulnerable state.

Once the Independent Directors see and hear or feel that the Chairman has lost credibility and respect from the Board, then it is time to act. The jeopardy of the organization is at stake and each day or week that goes by without action to change leadership, will increase the long term risk to the brand, confidence in the entire leadership and finally the people charged with making the organization compliant with all legal and ethical policies. A failure in people is an Operational Risk that far too often becomes overlooked or just plain ignored, due to the power base that may exist by the Chairman's role.

The Board of Directors are charged with the duties that involve the governance, regulatory, compliance, legal and ethical components of the organization. When any one of these starts to fail, then the faith in the entire leadership of the organization becomes a question mark. How many times do we hear the story that brought down the leaders with the words "Failure to Act"? Today and in the future, “serving on a Board of Directors means living in a fishbowl” according to Chief Justice Myron Steele of the Supreme Court of Delaware:

Once a difficult situation arises with the potential for litigation and its accompanying damage to the company’s reputation, the media will descend on the company, and directors must show 1) that they had a plan in place to deal with such situations in accordance with their oversight or compliance duties, 2) that the plan was reasonable and adequate, and 3) that the plan was followed. It is worth noting here some of the recent trends in corporation litigation. Two major categories of corporate litigation that a director might face include the traditional class actions based on breach of fiduciary duty, and derivative actions which are filed on behalf of the corporation due to wrong doing on the part of the board, either for its actions that resulted in a loss or its failure to act which also resulted in a loss through missed opportunity.

One of the major trends going on these days is to keep the Chairman separate from the CEO or President of the organization. The benefits are great especially if you have a CEO who will allow their ego to accept the other person as an ally and not competition:

In the public company arena, more and more companies are separating the Chairman of the Board position from the CEO. It turns out that this trend has benefits for earlier stage companies too. We believe that all CEOs – regardless of their experience – benefit from having a lead director on the board. In general, it has been our experience that boards (and the board meetings) work better when there is a Chairman in charge other then the CEO.

This strategy in overall Board Governance is a sound one. As a result of the "The Duty of Care" by the Board of Directors, at some stage it may require that the Chairman recommend to the Board that a CEO resign or be fired from running the day to day operations of the organization.

The Board of Directors and their behavior within the Board Room and in the functions outside in public are at stake. The governance of the Board of Directors begins with the Chairman but ends with each individual on the Board itself. If the Independent Board Director remains silent on any legal duty of the Board, they are putting all in jeopardy of a failure of the Duty of Care:

In tort law, a duty of care is a legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action in negligence. The claimant must be able to show a duty of care imposed by law which the defendant has breached. In turn, breaching a duty may subject an individual to liability. The duty of care may be imposed by operation of law between individuals with no current direct relationship (familial or contractual or otherwise), but eventually become related in some manner, as defined by common law (meaning case law).

It is the Chairman of Board who has the responsibility to keep the Independent Directors informed and aware of any persons behavior or actions that could put the entire board at risk. And even more importantly, it is the duty of each Independent Director to insure that they are constantly monitoring for any possible failure of the Duty of Care to their organization and their fellow Board Directors.

ECM Security: Trusted Information...

When it comes to Enterprise Content Management (ECM), security is an issue that continues to challenge most vendors. John Newton is in search of topics at AIIM that address the security needs of the market place:
Content Log

• Common identity. There needs to be a common way of addressing identity between different services whether those services are in the enterprise or outside.
• Common Models for Rights Management. The big, looming problem in content is the fact that huge numbers of users are adding, accessing or updating an even larger number of pieces of content.
• Distributed Directory Services. Identity is not sufficient for determining roles or entitlements.
• Mashup Frameworks for Security. Mashups, the integration of different systems at the browser level, represent the fastest-growing and easiest mechanism to weld systems together. Almost all mashups have no notion of security and only work on public systems.
• Search and Security. As search becomes increasingly federated, such as through the OpenSearch API, managing identity and entitlements on content becomes very problematic.

Whether John will find the answers is questionable. And that is exactly the issue when it comes to hosting or managing enterprise information. Almost a year ago before Stellant (Sealed Media) was purchased by Oracle, their survey of 29 CIO's who had invested more than $1M. in ECM had these as their top priorities:
The concerns were ranked on a scale of one to eight, eight being the most important.

1. Guarantee ISO 17799 compliance: 6.03
2. Protection of intellectual property during offshoring or outsourcing: 5.52
3. Protection of high- and executive-level communications: 4.79
4. Improvement of workflow-process automation: 4.41

So what?

If you are an ECM vendor and you only have so many bucks to spend on development of the next generation of your software, what are you going to add and what are you going to fix? So why is number one and two so important to CIO's who have invested so much money in their platforms?

Some of the answers can be found in the root cause of their concerns. We found some relevant discussion in a position paper entitled:

W3C Workshop on Transparency and Usability of Web Authentication by Jeffrey Ritter & Said Tabet

Statement of Issues: The conflict between the potential of Web Services and the inadequacy of web authentication is potentially best described as “a failure to communicate”. As enterprises extend and evolve into more dynamic, real-time facilities, central operations require the ability to express their security requirements in greater detail than can be currently enabled. Corporations must define and adhere to increasingly large directories of requirements in the management of their internal security controls; requiring compliance with those controls by participants in the extended enterprise is becoming essential.

Corporate operations increasingly distribute their computing and data processing requirements across a network of third party services, some of which are engaged and employed for controlled, finite sessions. But those third parties, for so long as they are processing data and functioning as part of the operating whole of the primary corporation, are being pressured to demonstrate their adherence to the security controls of their customers. This requirement is an expression of a requirement for trustworthiness—to be engaged as a part of the extended enterprise is to be trusted to perform in compliance with the applicable controls.

The enterprise who has exposure to continuous litigation is evaluating new ways to look at 3rd Parties who manage their information and this includes law firms. When you hand over management of critical and legally binding information to a 3rd party, trust is a key component of that decision. So how do you know if your law firm(s) and database marketing companies such as Merkle, Inc. or other outsourced service providers have the trustworthiness to be part of your extended enterprise? The fact is you don't unless you require the new and existing parts of the information supply chain in your organization to operate as one seamless trusted entity.

The greatest economic risk companies face with electronic discovery is choosing the wrong law firm. Under the new Federal Rules of Civil Procedure, the amounts at stake are not just legal fees or settlement costs; searching for and recovering electronic business records causes productivity losses and threatens revenue. Bottom line, selecting a law firm that is ill-prepared to effectively manage electronic discovery can cost enormously - internal records preservation and production costs are considered one of the largest uncontrolled expenses in corporate America.

So how do you select the right firm?

For corporations, Evaluating the Electronic Discovery Capabilities of Outside Law Firms: A Model Request for Information and Analysis provides corporate law departments, records management and IT departments an invaluable tool to ensure that the legal risks of e-discovery are competently addressed by their outside law firms.

Here is a peek at the line up so far this year by just one government regulator, the SEC.

Making the Business Case for Enterprise Content Management...

Making the Business Case for Enterprise Content Management: A Webinar

On July 24, 2007, at 11:00 a.m-noon, EDT, KM World will be presenting a national webinar on how ECM champions can make a more successful business case for new ECM solutions. The webinar will feature Jeffrey Ritter and Walt Whalen of Waters Edge Consulting in a discussion of Waters Edge work in this area. If you wish further information, please contact info@wec-llc.com.