Internet age and corporate culture

By Lee Bo-hyoung

There is an old saying that goes, “Fields have eyes, and woods have ears.” This is a warning to watch out for words and actions in every matter. But the advancement in current digital technology and ubiquity make even this proverb not enough. Almost everything is either recorded or traced beyond what fields see and woods hear.

How many times are we exposed to CCTV from the time we leave home in the morning to the time we come home from work in the evening? I expect we are exposed hundreds of times from the moment we board an apartment elevator in the morning. We are also exposed to CCTV even in a public sauna as well as in a taxi. In 2014, a phone conversation by an executive of a KOSDAQ-listed company was recorded on the CCTV installed in a taxi. The voice recording included: “The entertainment of the tax official was well done. Don’t worry about the tax audit.” The taxi driver reported this voice file to the authorities, and the related tax official and the company executive were subsequently arrested.

Digital recordings, of course, do not offer only risks. Accidentally recorded videos or messages also touch many people’s heart. The recent CCTV footage showing a North Korean soldier who escaped from the north side of the JSA of Panmunjom to the south area and the North Korean soldiers who were responding is much more like a scene from a movie. Last April, a McDonald’s employee, while on a delivery, stopped and helped an elderly man with mobility difficulties crossing a road in heavy traffic. This scene was recorded and became the talk of the town.

Digital recording is not just about CCTV; but rather, mobile phones, email, and the Internet record all of our daily lives. In an antitrust litigation filed by the U.S. Department of Justice against a famous software company, the CEO of the company got himself into a trouble with one email he sent years ago. Ultimately, the company solved the antitrust litigation by acquiring a competitor of its own web search engine.

Records posted and accumulated in cyberspace are not erased. So the issue of the right to be forgotten in cyberspace is being raised. As CEO of Macoll, I participate in job interviews of applicants to choose successful candidates. During the job interviews, I often experience applicants talking about the interviews, articles, and lectures I made even 10 years ago. My past words come back alive and demand responsibility in line with those words.

In this world, small traces do not disappear, but accumulate and cause great ripple effects. This environment becomes both a threat and an opportunity not only for individuals but also for companies. Just as small dots form a line and those lines form a surface, small episodes about a company are combined to form a story and those stories are gathered to form the reputation of the company. This reputation, which began in one small episode, not only has a profound impact on the company's normal business operations, but also may either support or jeopardize the company when the company falls into a crisis.

How should companies respond to this changed environment? Above all, it is important to educate each employee who represents a company to be conscious of these records. A certain company conducts an assessment when promoting employees to executive level that will sort out those who might have a problem with words and actions in the future.

The next step is to reduce the likelihood of a crisis in advance through a risk assessment of all business activities that could potentially cause a crisis. In particular, it is necessary to strengthen compliance within a company to various legal and regulatory requirements, including those under the Improper Solicitation and Graft Act and its enforcement decree that are expected to be amended in near future.

Companies are exposed to many eyes and hands that watch and record their bright and dark sides. These eyes and hands can make companies prosperous or even put them in trouble. To overcome such an environment, companies need to create a corporate culture that fits this environment.

Lee Bo-hyoung is CEO of Macoll Consulting Group.