When (and if) you ever think of or hear the term “Board of Directors”
you probably envision of panel of crusty, old-timers sitting around a long
board room table day-dreaming, doodling, or dozing off while a CEO goes through
yet another Death by PowerPoint presentation. If you think those people are
there just to enhance their resume and collect their stipend, think again. It’s
whole new world for Board members these days.
The visibility and implied responsibility that Board members have in
today’s business environment is as substantial as it has ever been. No longer
can Board members be asleep at the wheel while the CEO and/or the company
explore every whim or hare-brained idea they want. Starting somewhere around
the implosion of Enron back in 2001, investors and other interested observers began
asking in earnest “Where was the Board in
all of this?”
As recently as late 2010, the Board of Hewlett-Packard fired CEO Mark
Hurd in a very public way claiming some impropriety with a female contractor
and his expense reports. Even during the most recent scandal at Penn State, the
media began questioning why the college’s Board of Trustee’s did not raise a
red flag or call into question the very questionable actions of a rogue
assistant coach. So why has this group of people who had forever been seen by
many as rubber stamps now suddenly, and
finally, taking on task of ‘guardians of the corporate reputation’?
The Board of Directors or Trustees acts in trust for the shareholders
and employees of a company or taxpayers and students in the case of a school.
They are tasked with ensuring that integrity of action and quality of product
is delivered by the institution that they are with which they are engaged. It
is a duty that should not be taken lightly; and appears as though it is taken
more seriously now that ever.
Good thing too. In addition to overseeing their respective institutions,
one duty that governing boards must address is the various competing priorities
of mission, vision, growth and the mundane administrative. One contemporary
matter that will be occupying the board’s agenda more and more is that of
privacy - privacy of customer’s data, privacy of driver’s location, privacy of
users preferences, privacy of subscriber’s habits, and on and on.
Privacy must be a board level topic. Why? Because privacy and its
first cousin, security, are not just compliance issues anymore; they are
business issues. Business issues that deserve a seat at the table just like
innovation, marketing, sales and design have had for years. A company with a
core corporate value of privacy has a distinct competitive advantage over one
that treats its customer’s privacy cavalierly. Witness two of the year’s highest
profile cases of consumer backlash against a company’s apparent disregard of
its customer’s privacy: Google’s covert use of collecting Gmail accounts when
it rolled out its Social Circles product in May this year, and Facebook censure
by the FTC for a host of infractions, all centered around their indifference to
user’s privacy. Both companies must now submit to privacy audits for the next
20 years, said the FTC. Facebook took its act of contrition serious enough to
go out and hire not one, but two (!) Privacy Officers in response to the action.
As a practitioner of the art, I take it as my responsibility to
advance and elevate the issue of privacy all day and every day as far up the
chain as I can, and provide visibility to current and pending privacy issues to
senior management and ultimately Board if and when they need it. Like so many
other topics this year that got their time in the sun (the Arab Spring, WikiLeaks,
Occupy Wall Street, to name a few) it is the right time for another, quieter,
more discreet but no less revolutionary movement: to finally bring privacy
& security from the back room to the board room.
No comments:
Post a Comment