Personal blog of Yzmir Ramirez

OneTrust, a late stage privacy platform startup, announced it was adding ethics and compliance to the mix this morning by acquiring Convercent, a company that was built to help build more ethical organizations. The companies did not share the purchase price.

OneTrust just raised $300 million on a fat $5.1 billion valuation at the end of last year, and it’s putting that money to work with this acquisition. Alan Dabbiere, co-chairman at OneTrust sees this acquisition as a way to add a missing component to his company’s growing platform of services.

“Integrating Convercent instantly brings a proven ethics and compliance technology, team, and customer base into the OneTrust, further aligning the Chief Ethics & Compliance Officer strategy alongside privacy, data governance, third-party risk, GRC (governance, risk and compliance), and ESG (environmental, social and governance) to build trust as a competitive advantage,” he said.

Convercent brings 750 customers and 150 employees to the OneTrust team along with its ethics system, which includes a way for employees to report ethical violations to the company and a tool for managing disclosures.

Convercent can also use data to help surface bad behavior before it’s been reported. As CEO Patrick Quinlan explained in a 2018 TechCrunch article:

“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening.”

Quinlan wrote in a company blog post announcing the deal that joining forces with OneTrust will give it the resources to expand its vision.

“As a part of OneTrust, we’ll be combining forces with the leader across privacy, security, data governance, third-party risk, GRC, ESG—and now—ethics and compliance. Our customers will now be able to build centralized programs across these workstreams to make trust a competitive differentiator,” Quinlan wrote.

Convercent was founded in 2012 and has raised over $100 million, according to Pitchbook data. OneTrust was founded in 2016. It has over 8000 customers and 150 employees and has raised $710 million, according to the company.

It’s not always easy to do the right thing or to make ethical decisions in a complex business environment. People get lost inside large organizations and group think can overwhelm even normally ethical individuals. Convercent has created a platform to help, and today it announced a new benchmarking dashboard to allow companies to measure just how well they are doing from an ethical perspective.

In recent times, we’ve witnessed the impact it has when companies don’t behave ethically. Convercent CEO Patrick Quinlan says there is real cost for behaving badly both in terms of dollars and reputation. He believes that it’s in a company’s best interest to stay on top of undesirable behavior before it spirals out of control.

Quinlan pointed out whether it’s the diesel scandal at Volkswagen or the sexual harassment revealed by Susan Fowler at Uber, it has changed the conversation about ethics. He says it’s no longer just about bottom-line financial results, how you behave as a company matters too in the court of public opinion and in financial markets.

He believes this can be measured, and the Convercent Ethics Dashboard is designed to provide metrics about how well your company is complying with a set of internal guidelines. The Convercent platform includes components to enable employees to safely report bad practices going on in a company such as bribery, corruption, sexual harassment and more. A more automated API driven system pulls in data from a variety of internal systems and analyzes that for ethical gaps.

Much like companies audit their financial systems, you can start to audit how ethical the organizational structure is and how negative behavior is being handled. The company not only looks at internal data, it can help customers benchmark against others in their industries. Quinlan says that it’s possible to spot a trend even before someone reports it.

“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening,” Quinlan explained.

He says trend reporting like this can help a company spot a problem before it spirals out of their control. In other cases, it may be more subtle, but Convercent can pick up less obvious trends as well.

Convercent, which launched in 2013, has raised almost $72 million. They have 630 customers with 6.4 million employees accessing the Convercent platform. Customers include Kimberly Clark, Microsoft, Capgemini and Under Armour.