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Make privacy a priority or face the consequences, warns Cavoukian

Corporate directors who fail to address privacy as a major issue are failing to live up to their responsibilities to both customers and shareholders, says Ontario Information and Privacy Commissioner Ann Cavoukian.

The reputation that corporations quickly acquire for how they deal with their customers' personal information can either drive business - or drive it away, said the Commissioner, who released a paper today aimed directly at corporate directors.

Privacy and Boards of Directors: What You Don't Know as a Director Can Hurt You cites a number of recent privacy breaches where organizations failed to protect personal information. These included:

a pharmaceutical company that inadvertently disclosed the e-mail addresses of 600 patients who took Prozac;

a data management company that failed to protect a computer hard-drive that contained the personal information of thousands of Canadians;

the misuse of personal health information as part of a promotional campaign for an anti-depressant.

These are just some of the incidents raising questions about the liability of directors in protecting the personal information collected, used and disclosed by their organizations, said the Commissioner.

A lack of attention to privacy, she said, can result in a number of adverse consequences. Among those she cites in the paper are:

violations of privacy laws;

harm to customers whose personal information is used or disclosed inappropriately;

damage to the organization's reputation and brand;

financial losses associated with deterioration in the quality and integrity of personal informatioinformation;

financial losses due to a loss of business or the failure or delay in the implementation of a new product or service due to privacy concerns; and

loss of market share or a drop in stock prices following negative publicity about a "privacy hit."

"Personal information must be protected - and more companies are starting to realize it is in their own best interest to do so," said the Commissioner. She stressed that companies that succeed in carving out a reputation for protecting personal information can gain a significant advantage over others. "Research has shown that consumers are becoming increasingly concerned, better informed and more demanding with regard to the protection of their personal privacy."

The paper explains what fair information practices are (internationally recognized privacy principles), outlines the business case for implementing sound privacy practices and suggests key steps that directors should take. The paper concludes with a series of questions that can be used to help determine if a company has fully addressed privacy compliance.

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Privacy and Boards of Directors: What You Don't Know Can Hurt You, 10.1.04

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