Why Executives Are Now on the Hook for Data Protection Failures

Think that data protection and operational resilience are only the responsibility of IT? Guess again. The buck now stops at the top.

Today, data security and business continuity is a key executive responsibility. C-level executives up to the CEO and if applicable, the Board of Directors, must be actively engaged in these issues to protect the organization and meet their fiduciary responsibilities. Too often the responsibility is delegated to IT staff. IT personnel often do not have the expertise and perspective to make decisions alone. This is why it is imperative that executive leaders and IT become more aligned.

Our recent blog “Data Backup vs. Archiving: Which one do you need?”, focused on the common misconception that a backup is enough. We’ve seen too many poorly managed and outdated backups fail, and they are all too easy to ransom. Rather, our executive conversations now focus on what we call “full circle resiliency.” This means having a backup, a failover option, cyber security and an archiving and governance solution. Each element meshes into a strategy that protects the organization’s knowledge and IP.

Adopting this full circle approach to business continuity and providing highly engaged leadership and support helps to avoid these common threats and risks to the organization and the leadership.

Prevent intellectual property theft

Companies collect and store a vast amount of sensitive data. This can include customer information, financial records, trade secrets, and intellectual property (IP). Executives have a responsibility to protect this sensitive data from theft, loss, or misuse.

An incident can have severe consequences: financial losses, reputational damage, and legal liabilities. Stolen information is now often exfiltrated to the internet or competitors. This undermines the company’s competitive advantage, reputation, and market position. The loss of valuable IP can negatively impact the organization’s growth and innovation.

Ensure operational resilience

A successful cyberattack disrupts the company’s operations, sometimes for weeks. Important information and applications may be inaccessible, affecting decision-making and day-to-day activities. Such disruptions have negative cascading effects throughout the organization and supply chain.

Executives need to understand the risks and deploy measures to ensure business continuity. This includes data preservation strategies, failover and recovery plans, and employee training. By prioritizing business continuity, executives can safeguard their company’s ability to function.

Prevent legal and regulatory issues

Depending on the nature of the breach and the applicable laws and regulations, the company may face legal consequences. Regulators may investigate the incident and impose fines or penalties. Those affected may take legal action, seeking compensation for damages. Legal battles can be costly, time-consuming, and further damage a company’s reputation.

To avoid these issues, executives need to ensure that their company meets regulatory requirements. Now there are a wealth of regulations around protecting personal data too.

The European Union’s General Data Protection Regulation (GDPR) are well known. But now in the United States, California, Colorado, Connecticut, Utah, and Virginia have enacted similar rules. As have the Federal Trade Commission and the Securities and Exchange Commission.

Inadequate data security measures can also inhibit business development and future business. Executives must stay informed about relevant regulations and the technologies needed.

Minimize financial losses

A successful cyberattack can result in significant financial losses for the company. The costs include ransom payments, data recovery and restoration, forensic investigations, legal fees, regulatory fines, and potential lawsuits from affected parties. These expenses add up and impact the company’s profitability and financial stability.

Additionally, prolonged disruptions in business operations can lead to losing future business opportunities. Proactively addressing data protection and business continuity, executives can significantly mitigate these risks.

Avoid reputational damage

In today’s digital environment, most stakeholders in your ecosystem care about these issues. Disruptions in business operations erode trust with clients, vendors, prospective customers, even employees. They want to be sure that the organizations they choose to do business with won’t be shut down by ransomware attacks.

Executives who focus on data protection and business continuity build trust, loyalty, and a competitive advantage.

Satisfy stakeholders

Shareholders, investors, and board members now expect companies to have robust business continuity strategies. Otherwise, they too may be faced with legal action.

By demonstrating a commitment to protecting valuable data assets and ensuring operational resilience, executives can instill confidence in their company’s management and attract investment opportunities.

Prevent talent loss & negative morale

A data breach or ransomware attack can negatively impact employee morale and confidence in the leadership. Employees may feel a sense of insecurity, especially if their personal information is compromised. Low morale can lead to decreased productivity, increased turnover, and difficulties in attracting and retaining top talent.

Senior executives must address data protection proactively to mitigate these risks and protect the company’s financial stability, reputation, legal standing, and operational resilience. Failing to do so can have severe consequences that may take a long time to recover from.

To learn more about how we can help your organization address its business continuity needs, schedule a no-obligation peer conversation today!

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