Inside 1to1:Privacy

Protecting Privacy Key to Corporate Ethics

February 1, 2008

By Don Peppers and Martha Rogers, Ph.D.

When compiling their list of the 100 Most Influential People in Business Ethics, the folks at Ethisphere didn't specifically seek out individuals for whom safeguarding privacy and security was a priority. But the final list, released last month, includes more than its share of privacy boosters -- starting with the top-ranked honoree, Neelie Kroes, the European Commissioner For Competition.

This doesn't surprise Alex Brigham, executive director of the Ethisphere Institute. Though the primary purpose of the rankings was to assess which execs had the most overall impact on ethical business behavior -- via their work on government rules, company practices and sustainability efforts, among other things -- it ended up revealing just how much of a concern privacy has become to A-list leaders with sterling ethical reputations.

"Privacy isn't just on their radars. It's become one of the top five risk areas," Brigham says. "It's not as high as environmental issues or compliance ones or the attraction and retention of employees, but it comes up routinely in conversations we have." Asked if an employee at a company that endured a large-scale privacy or security breach could ever find him or herself on the list, Brigham responds with a terse, "No chance."

Brigham and his Ethisphere peers, as well as the panel of academics who helped compile the list, believe that proactivity on the privacy and security fronts is quick becoming a hallmark of smart and ethical companies. While they acknowledge the obvious financial impact -- such as how organizations who suffered a breach often feel it in their stock price -- they believe that privacy cuts to the core of ethical conduct, especially in this tech-centric era.

Brigham doesn't think most organizations are tweaking their policies and procedures accordingly. Rather, they're trying to address the issue purely through technology. "Ethical companies aren't leaving anything to chance here. They know that [privacy and security issues] are a problem of awareness, not one of technology," he explains. "We look at code after code, and so much of it is 'Don't sexually harass somebody' or 'Don't steal.' What the people on the list realize is that they have to pull privacy into their codes of conduct and make it an everyday priority."

Brigham illustrates this with some high-profile breaches: TJX's unwitting exposure of millions of nuggets of personal data, The Boston Globe's decision to protect newspaper bundles by wrapping them in scrap paper adorned with credit card numbers, and a newspaper's photo of a lottery prizewinner's check -- including home address and Social Security number.

"It's always the person I like to call JOE -- just one employee -- that can blow it for everybody," Brigham says. "Properly maintaining corporate assets, and this type of information is definitely a corporate asset, is certainly a part of ethical business behavior. Those people failed pretty badly."

The list's honorees largely agree with Brigham's expansive definition of what comprises ethical business conduct. Dr. Leslie Gaines-Ross, chief reputation strategist at marketing firm Weber Shandwick and number 84 in the Ethisphere rankings, points to a recent study of global business executives she conducted: Safeguarding Reputation reveals that privacy and safety issues, including loss of data, rank high on the list of things that can scuff an organization's reputation.

"It surprised me, to be honest," she explains. "If we'd asked the same question -- about the factors that can significantly damage a company's reputation -- five years ago, they wouldn't have come in anywhere near as high." Among the threats privacy/security issues outranked were risky supply chain partners, online rumors, factory breakdowns, regulatory noncompliance and controversies over executive compensation.

Still, Gaines-Ross believes that awareness of privacy and security issues are nowhere near where they could be. "I'm not sure if they've risen all the way to the board level, as they should, but they're definitely on the mind of a majority of organizations."

Another of Ethisphere's honorees, Andrew Weissmann, a partner at law firm Jenner & Block and number 71 on the list, admits that he "doesn't really relate" privacy/security to ethical behavior. At the same time, Weissmann -- whose resume includes stints as Director of the Enron Task Force, Chief of the Criminal Division of the United States Attorney's Office for the Eastern District of New York, and Special Counsel to the Director of the Federal Bureau of Investigation-- notes that organizations who fumble around with privacy and security could well have issues elsewhere.

"It doesn't speak well about their corporate culture," he says. "You're trying to create an ethical culture. You don't want to do that by means that most employees and people outside the company would find problematic."
 

You can reach Don Peppers and Martha Rogers at dpeppers@1to1.com or rogers@1to1.com