CDO, Information Management and Governance

When do data-dependent startups need a Chief Data Officer?

More and more startup companies are exploiting business opportunities tied to data.  Whether developing data-dependent AI, re-imagining how to conduct familiar business processes in innovative ways, or intelligently designing and building datasets drawing from a growing variety of sources.  The common theme for this class of business is the reliance on, and exploitation of, data.

In the earliest stages, startups are focusing their energy and time on creating their product or service.  As they begin to mature, they naturally start to move toward a state where they are returning value to their stakeholders – profits.  Perhaps they plan an IPO or to be sold to an investor, or some other larger entity.

This paper explores options and approaches that companies could consider to determine if and when they should appoint a Chief Data Officer (CDO), as well as their scope of responsibilities.

What kind of startups should prioritize appointment of a CDO?

At some point in their lifecycle, any company that is dependent on data will need to implement data management processes.  These include processes to acquire, ingest, catalog, track and at some point, dispose of data. If the data is licensed or belongs to others, they will need to understand and comply with applicable obligations.  They will need to create a data architecture, build repositories and apply appropriate controls to protect the data.

This description admittedly covers a lot of scope.  So the following adds a little structure to the thought process:

Does the startup…

  1. Handle large volumes of data?
  2. Have data as core to it’s business, where completeness, accuracy and currency are critical?
  3. Have products and services that are dependent of data, but are themselves not data products?  (e.g., a website or app with data in the back-end vs. a licensed database)
  4. Need data that is licensed or procured from others?  
  5. Use personal data (PII) or health data (PHI)?
  6. Need to demonstrate data lineage or provenance?
  7. Create new data, which has intrinsic value?
  8. Live with the risk that a data incident could cause irreparable harm?

If the answer to many of these are Yes, then the company should consider appointing a CDO.  Moreover, if the company wants to go public or be bought by another company – especially a public company where the transaction is material, the startup may be expected to demonstrate discipline around the treatment and protection of data, including documented policies and procedures.  While a CDO isn’t necessary to do this, a CDO can design and implement practices and disciplines that will provide comfort in a due diligence setting, and integrate those disciplines into the daily business routine of the startup.

What value can a CDO provide to a startup?  

Removing Barriers:

A CDO can provide a range of value to a startup.  The CDO looks at a company’s business through the lens of data, and is sensitive to both the value (revenue) cycle as well as the risks and obligations, recognizing they go hand-in-hand.  From this vantage point, they can enable the business by sourcing data and removing barriers, and can implement right-sized controls, proportional to actual risks and obligations. In effect. they can enable the data scientists – who seem to always “need…more…data…” – by providing relevant data, aligned with business objectives, where obligations and risks are managed elsewhere.  Call it “unencumbered data”.

Scientific Method:

A CDO understands and recognizes the transformative potential of data, but also a balanced sense of proportion – especially when resources are scarce.  By implementing structure around the activities of data scientists, a CDO can improve the chances that research will be fruitful and aligned with business objectives – with a necessary degree of transparency for stakeholders.  

Protection and Compliance:

Most information that companies want to use will have some kind of requirements around handling.  These will emanate from one or more of the following:

  1. The data is regulated; many data projects will incorporate information about people — PII or PHI — likely controlled by one or more regulatory frameworks (e.g., GDPR, CCPA, GLBA, HIPAA/HITECH)
  2. The data belongs to others and is governed by a contract or Data Use Agreement
  3. The data is valuable and needs to be protected – these protections might be present as a result of the data being regulated.
  4. A breach of the data could result in harm or loss, either to the company or to data owners, and should cause the company to respond in a certain way.

The CDO, who should understand the nature of data, can work with the CISO and counsel to implement proper controls to protect the data and comply with requirements.

Ethics:

By understanding the business and compliance perspectives of data, the CDO can provide perspective on the ethics of data use.  So much of the new digital economy is exploring uncharted territory, where potential uses haven’t yet been imagined. There are lines not yet drawn around what industry should do, even though they can do it.  Data-driven inventions can cause real or perceived harm to consumers as they disrupt industries.  Whether its financial services, advertising/marketing, insurance, consumer electronics, or the breadth of online applications and properties.  Data is central to these and a misstep can be catastrophic.

Optics:

Transparency is a cornerstone of the capital markets.  And while data-driven startups are inventing new ways to conduct business and benefit consumers, much of it is betting on the future.  With so many unknowns, appointing a CDO can help inspire confidence that a data-dependent startup is approaching their objective with a view to managing their data assets for the longer term.

What can a CDO do?

85% of the time, “Big Data” initiatives fail to meet their objectives, and 50% of startups fail in the first year.  Start-ups relying on data can’t afford many false starts. The CDO can spearhead data management activities that can, in aggregate, reduce risk of project failure and increase the likelihood of achieving the desired outcome.  These might include

  • Vision and strategy, involving leaders across the company
  • Data inventory
  • Data architecture
  • Data acquisition
  • Data maintenance and quality
  • Data retention and disposition,
  • Risk assessments, protection and compliance processes

While these are not necessarily discrete activities, and should certainly be scaled to the situation, having a framework in place would be very useful to (1) enable growth, (2) permit introduction of different data sets, and (3) give Boards of Directors, auditors, reviewers and regulators a level of comfort that the company takes data management seriously.

Balancing cost vs value?  Alternatives…

Many early stage startups are focused on laying out the important initial groundwork to sustain themselves — developing products, recruiting talent and identifying customers.  As they move through funding stages and become established, they might be looking toward aggressive growth, IPO and engaging in discussions to be acquired. This is a sliding scale – and it may not make sense to appoint a full-time CDO initially.  Startups should consider engaging a consultant or a CDO on a contract basis to implement and appropriate framework. As time and circumstances evolve, the time commitment can be adjusted.

Who should drive the decision?

The role is so important and strategic, that the CEO should drive the decision to appoint a CDO.  The CDO should expect to work closely with the CEO, as well as the rest of the executive team. Moreover, the CDO should expect to meet with the investors and advisory board to reinforce the role and how it will help the company accelerate forward.

Conclusion

It goes without saying that startups leveraging data science are not at odds with managing data, or the scope of a CDO.  They are extremely complimentary, to the point where an CDO can dramatically improve the probability of a data program, or data-dependent startup, succeeding.  

CDO, CPO, Information Management and Governance, Information protection, Privacy

CDO’s Role in Managing Data Breaches

In the span of a week, we’ve see data breaches affecting 600 million people.  For perspective, that’s more than every man, woman and child in the US, Russia, Canada, Britain and Australia combined.  And the damage may not be done, as scammers and other bad actors frequently take advantage of the widespread confusion that follows these sorts of incidents.

Moreover, as the investigations unfold, we will begin to see the breadth and depth of what went wrong, who did what, and what steps must be taken to prevent this from happening in the future.

The risk manager in me says this will happen again, just as it’s happened before.  Data experts know all too well the challenges in implementing controls proportional risk, and counter-balancing every data initiative with the right set of controls — starting with asking whether the proposed data collection or use benefits are worth the downside risk.

So what does this mean to a Chief Data Officer?  In a word, everything. Why? Because data is at the center of every breach, and the CDO should be looking at the full picture around both data use and data risk.  The emerging role of the CDO in business positions them as a key executive in helping to reduce the risk of breach as well as to navigate the aftermath, protecting the organization’s brand.

Before a Data Incident

In the normal course of business, the CDO should be executing against the company’s data strategy and vision, and maintaining an inventory of critical data assets.  The inventory should include key meta-data — ownership, obligations, location, permissions, value, uses, etc — which forms an important part of a periodic risk analysis.  

The risk analysis considers threats, vulnerabilities, obligations and relative value of the data to conclude on appropriate protections.  The more progressive CDO’s will construct a holistic threat analysis that answers the question, “what could go wrong?” or “how might information be breached?” taking into account behavior of personnel, company culture, key business activities and positioning of the company in the marketplace.  Typically, such an analysis covers the spectrum from the seemingly mundane (accidents caused by carelessness or poor judgment), all the way to industrial espionage targeting company data, with a total of 5 or 6 categories in between. This analysis serves as a sounding board to validate the range of control activities, which includes everything from policy, to business practices, to training, to technical controls, and some instances where certain risks have to be accepted, insured against, or perhaps transferred elsewhere.

The CDO should provide business requirements to the CIO and CISO for appropriate technical measures to provide protections, which – depending on the sophistication of the company – could range from providing data classifications, to which the CISO or CIO react, all the way to explicit requirements for, say, encryption and access control.  

The inventory shines a light on whether all data on hand is truly necessary, or whether some can be disposed of.  Moreover, the CDO’s analysis of business processes using data can also question whether all data being collected is necessary.

The Board of Directors, senior executive leadership and internal audit should – to appropriate degrees – be aware of how the company is using data as well as the CDO’s assessment of risk and mitigating controls.  This will allow them to understand the risk/benefit around data use, and weigh in whether the business opportunities related to data use are sufficiently compelling.

The CDO maintains relationships with counsel to understand the legal aspect of obligations, and obtain sign-off on the sufficiency of the compliance programs.  The CDO should understand their regulators’ expectations and requirements around handling data, making sure their protection controls meet regulator expectations.  These steps are key, because most breaches — especially where regulated data is involved — will result in legal or regulatory exposure, and having transparency with counsel and regulators with streamline investigations.

The CDO should own (or be a key stakeholder in) the data incident management process. This is the process whereby data incidents — data loss, possible breaches or exposures — are logged, analyzed and investigated.

During a Data Incident

Sometimes, a target organization is aware of a data incident as it’s occurring.  Many companies have processes to respond in this event, which may focus on containment, interruption, or other priorities (allowing an attack to proceed in a controlled way may help law enforcement with their investigation).

The CDO should be available to help answer questions about the nature and location of data that may be accessed, as well as to begin preparing post-incident planning. Some data owners (e.g., Federal Government) have explicitly defined time frames to report data incidents, the CDO can get ahead of these requirements.  

Following a Data Incident

Companies should have a crisis management plan that includes defined procedures to be followed in the event of a cyber attack, data breach or exposure.  The details of these plans are tailored to each company, and generally emphasize damage control and protecting the brand — which in itself may follow one or more tracks, based on the nature of the incident.  

Stakeholders include senior leadership, legal counsel (sometimes supported by outside counsel), the head of security, the CIO and CISO, and often on-call cyber security consultants.  The overall objective is to understand what happened, how it happened, who perpetrated the event, what data was affected, overall impact, and how to repair the damage and prevent the same thing from happening again.  

Along these lines, the CDO should help assess the impact of the loss, in terms to cost to the company — defined as asset value, or competitive impact, or brand damage to the organization.  The CDO can be a resource to analyze the nature of the data to determine whether external notifications are required, and – in conjunction with counsel – whether there is a regulatory impact.  Who owned the data? Do regulators, customers, vendors, partners or clients need to be notified? Is there a timeframe requirement for notification and is there a specific process to be followed?  Do affected parties need to be offered – or are they likely to demand – compensation?

The CDO can help analyze what went wrong, by having an understanding of the processes and policy around data use.  Was there misuse of data or was it stored, processed or transmitted in ways it shouldn’t be? Was there a control failure, or absence of control?

This analysis concludes with a reassessment and remediation of processes and controls.

Conclusion

Most corporate leaders recognize the near-inevitability of a breach or hack.  This is due to a variety of factors, including the increased complexity of information systems, coupled with the expansion of data-rich cognitive and robotics initiatives, many of which rely heavily on data.  Data sets themselves are growing at a dramatic pace.

Companies are appointing CDO’s to try and coordinate the activities around the leverage of data, and increasingly, they are assigned responsibility for assessing and managing risk around data.  This is not a bad thing at all, since it helps keep risk management activities proportional to risk and the nature of the data.

CDO’s should approach the challenge with a plan, emphasizing transparency and engaging appropriate stakeholders.  Whereas today, Boards often look to the CIO and CISO to understand how data handled and protected, going forward they will increasingly look to the CDO.

 

CDO, CPO, GDPR, IAPP, Information Management and Governance, Information protection, Privacy

Data Regulation is the New Reality

On October 28th, the BBC’s Chris Baraniuk reported that recently, Tim Cook was in Brussels to address the International Conference of Data Protection and Privacy Commissioners.  In his remarks, Mr. Cook, referring to the misuse of “deeply personal” data, said data was being “weaponized against us with military efficiency”.  The BBC went on to report that Mr. Cook said “We shouldn’t sugar-coat the consequences,” and “This is surveillance.”

The speech reaffirmed Apple’s strong defense of user privacy rights, in contrast to competitors business model of driving advertising revenue by analyzing people online habits.   “The trade in personal data served only to enrich the companies that collect it, he added.”

Mr Cook also praised the EU’s new data protection regulation, the General Data Protection Regulation (GDPR), and went on to say that other countries “including my own,” should follow the EU’s lead toward protecting personal data.

To be sure, economics are at the heart of the concern.  Given the string of events that have occured, where data is mishandled or exposed, companies are at risk of losing customer and stakeholder trust, and without that trust, it not clear how they can drive or thrive in the data economy.  So coming together in support of a GDPR-like framework makes sense; it raises the conversation to a global level, and can result in a safer and more efficient environment in which to conduct business. Companies that embrace the framework will have more flexibility and resilience, while those firms paying it lip-service will eventually themselves be at the center of their own data crisis.

And therein lies the rub.  Compliance is not the same as data protection, especially when the regulation is principles-based and not prescriptive.  If the objective in implementing a framework is to comply with a regulation, one is tempted to overlay one’s current operating model with the requirements of the regulation and address gaps.  While it may reduce the risk of data incident, it will probably do so by coincidence.

On the other hand, if companies went about handling information with the strongest possible ethics, where they routinely assessed and addressed risk, recognized and avoided moral hazards, then the incidence of breach and miss-use would naturally be much lower.

The obvious competitive issue is that the second scenario is more expensive and less flexible.  Moreover, if a minority of companies took this approach, they would be less prosperous, and economic darwinism would cause them to go extinct.  And suppose there were a major data “catastrophe”, and the market environment were made up of a combination of those that embrace a high degree of data ethics and those that don’t, the market may not recognize and reward the higher resilience of the highly-ethical-but-less-profitable.  Instead, what we’ve seen is the mainstream market reacts with shock and incredulity and – at the prompting of regulators – implement newly-penned frameworks meant to avoid future occurrences of those events.

While one might argue that black swan events are by definition unforeseeable, one can equally argue that waiting for them to strike before implementing any sort of protection strategy simply opens the door to more black swans, and when events do occur, they result in unnecessarily high impact.

Apple’s Tim Cook makes clear his view that status quo is unacceptable.  As an unquestioned highly credentialed leader and insider in the technology (and information) world, his use of words like “weaponized” and “this is surveillance” should not be taken lightly — he knows what he’s talking about.  No doubt more so than the rest of us.

So as with most things, a thoughtful balance must be considered.  The dilemma is how to balance among the following:

  1. The rapid growth the volume to data aggregated by companies, across the board from business-to-consumers, to business-to-business companies, and ranging from companies providing services to those providing goods — and the increasing overlap.

  2. As a subset of that, the increase in the volume of personal data stored online, and the ability to gather even more data about individuals – habits, interests, locations, views and opinions.

  3. The rapid evolution in the science of data analytics, and the ramp-up of technology able to manipulate and compute data on a mammoth scale.

  4. Coupled with this, is the increasing ability to combine and analyze datasets in ways that allow for the creation of new and credible data and conclusions.

  5. As the size and richness of the datasets grow, so do the consequences of an event (whether a breach, misuse, abuse or exposure).  These range from a sense of creepiness when personal data is exposed, all the way to the very real consequences of insidious manipulation of our views and opinions.

In short, how can companies derive benefit from data, while managing the risks?  Neither momentum is letting up — the momentum around utilizing the expanding datasets, or the momentum around data events and subsequent responses from regulators.

One realistic way is to embrace and build a culture around managing all aspects of data, in lock step.  This is built into a data management program, led by a Chief Data Officer, comprised of three interdependent functions:

  1. Data Leverage, focussed on enabling the business use of information,

  2. Data Protection and Compliance, focussed on addressing risk resulting from data leverage, in terms of misuse, loss or non-compliance with obligations

  3. Data Quality, ensuring that the data being used retains its accuracy and integrity

This model is coupled with appropriate oversight, in the form of:

  1. A steering group with senior stakeholders from across the company,

  2. Direct oversight by CEO or COO,

  3. Connectivity into other key functions, including the CIO, CISO, HR and Legal,

  4. Active oversight by the Board of Directors, to support business initiatives and agree with risk mitigations plans.

A standing filter for any and all data initiatives needs to be ethics, and a consideration for the consequences of the genie getting out of the lamp.  Is the company willing to handle the outcome, if an initiative goes wrong? What is the risk, how is it managed, and are the right people accepting the residual risk?

The discussion is reaching a fever pitch with leaders of the most influential technology companies adding their voices to the conversation.  Any company wanting to join the data economy should consider doing so with an appropriate data management framework. This will position them to accelerate as new opportunities present themselves, while being able to manage events as they occur and accommodate compliance requirements that arise.

 

Information Management and Governance, Information protection, Uncategorized

The Role of the CDO in Counter Industrial Espionage

When one thinks of spies and espionage, our imaginations usually turn to James Bond and Jason Bourne stories.  But with the end of the cold war, many former intelligence officers found more lucrative opportunities in the private sector, offering their services to non-government organizations that were perfectly willing to leverage the research and development capabilities of their competitors.

Fast forward to a time where the economic competition between companies affects political tension between nations, where some nations see nothing wrong with applying techniques developed during cold and shooting wars to provide their own companies with ill-gotten advantages – even at the expense of political allies.

Politico recently published this article that discusses how companies in the Bay Area have become targets for industrial espionage originating from China, Russia and other nation-states.  The article touches on the breadth and depth of the problem, including making a very interesting point that many companies choose not to prosecute espionage cases.  Its remarkable that even when faced with irrefutable evidence, many corporate leaders choose to ignore the facts and fail to notify stakeholders, for fear of how it will reflect on them or affect share price.

There is no doubt that building defenses against industrial espionage is a complicated task, made harder because (1) information has to remain available and usable by the organization, and (2) the organization has to anticipate a wide range of attack “vectors” whereas the intruder only needs one to work.  And if this wasn’t complicated enough already, industrial spies don’t just target computer systems, they target people.  If truly successful, the organization won’t know they’ve been hit until they see a foreign version of their new product, far too similar to the original to be coincidence.

This is not an IT problem

Most organizational leaders equate information to technology, conclude this is an IT problem, and assign responsibility to the CISO to implement appropriate protections.  This logic is flawed for many reasons, not the least of which is the CISO typically has little to no ability to enforce security policies for systems not “owned” by the CIO, nor have the organizational scope to address the behaviors of people.

Although information theft frequently include IT and cyber vectors, people are often near or at the epicenter of an espionage case.  People enable the theft either by actively participating, or by carelessly allowing it to happen.  Professionals who study espionage have determined that people are motivated to betray their employer (or country) for one of 4 reasons, using the acronym “MICE”:

  1. Money – the actor either sees this as a way to get rich, or are financially distressed (in debt, recently divorced, have a gambling problem, etc).
  2. Ideology – the actor believes the organization is somehow evil, and betrayal is a way for the actor to cause harm or suffering, thinking it was deserved,
  3. Coercion (or Compromise) – the actor has a secret that makes them vulnerable to extortion, or are threatened with physical harm to themselves or their loved ones,
  4. Ego – the actor thinks they are smarter than the organization, and can get way with it, or are enticed to spy believing it makes them more important.

None of these touch the ways in which people through their actions, innocently permit espionage to occur.  People are helpful and hold the door for others – especially if their hands are full.  Or take calls wanting to assist the caller (who they assume are authorized to ask what they are asking).  People are reluctant to challenge strangers in the hallways, and a startling number of companies don’t require employees and visitors to display ID badges while on-site.  Doors and drawers are left unlocked and clean-desk policies are seen as burdensome.  There is widespread belief that “it can’t happen to us.”

Where does the CDO fit in?

Industrial spies seek to steal information to gain economic or competitive advantage, and work tirelessly on creative ways to get it.

In basic economic terms, its worth stealing information if theft is cheaper than developing it — assuming ethics aren’t an issue, and the risk of getting discovered is acceptable.  So defending against the theft can be thought of as making it more expensive to steal information than it is to develop or acquire it through other means.

The CDO fits in because they are at the intersection of information use, protection and quality.  They should be in the best position to understand what information is most valuable, or put another way, what information, if lost or stolen, would cause what degree of harm to the organization.  And by understanding where and how information is stored and processed, they are in a good position to provide input on how to protect it.

The CDO’s strategy includes elements that are helpful to guard against industrial espionage.  Some steps the CDO can take include

  1. Classify information as an asset (even if informally, and not captured in the financial statements), and assign economic value, so that protections can be developed that are proportional to the value.
  2. Inventory information and work with the Data Governance Council to identify those broad categories that are most vulnerable and attractive to a spy.  They might include the obvious — patents, methods, formulas, algorithms — as well as some less obvious — executive contacts information, network diagrams, or even payroll information (knowing how much people are paid help know who may be vulnerable to financial pressure).
  3. Liaise with corporate security to gain an understanding of how they are working to protect the organization.  Many of these leaders are former law enforcement professionals, often don’t have an appreciation of the relative value of information within the organization, and will welcome allies on the “business side” to help raise awareness and improve corporate posture.
  4. There is no doubt that nowadays, cyber is a vector frequently exploited to steal information.  Liaise with the CISO to convey proper information protection requirements that need to be reflected in IT systems, proportional to the value of the information in question.
  5. Again, working with the CISO and compliance groups, adjust data loss prevention (DLP) tools to monitor for exfiltration of the most sensitive information.  These procedures need to include investigative and response processes, and may already exist (e.g., privacy rules often include requirements for breach management procedures, and these are very leverageable for this purpose).
  6. A significant part of a risk mitigation plan includes raising awareness among the organization’s people — employees as well as contractors and third-parties.  The CDO can spearhead this themselves, or collaborate with the group responsible for promulgating policy and procedures covering actions and behavior.
  7. Some spies have figured out that if their primary target (say, a high-tech company) is too hard to penetrate, they will instead shift focus to the target’s advisors (legal, auditors, consultants, professional services), since they are trusted by the primary target, but are often more vulnerable and may have weaker controls.  The CDO should understand what business partners and third parties have access or custody of information and — and along with the TPO (Third Party Oversight) function — can mitigate the relative information risk associated with them.

Protecting an organization against industrial espionage is very difficult for a wide range of reasons.  And since the asset sought after by the spies is information, the CDO is central to implementing protections and managing risk.  Success can’t be measure in absolute terms, but instead in increments — implementing small steps puts the organization in a better position than not having the small steps.

Contact me at james@jhoward.us

Information Management and Governance, Privacy, Uncategorized

Bringing the C’s Together

The Chief Data Officer is in a unique position because they bring together the ever expanding catalog of available information and opportunities to bring value to their organizations. To be effective, they need to look at information objectively, realizing the upside potential, while managing risk and acknowledging their handling responsibilities.

An “I” in PII stands for INFORMATION

The range of information can and should include all the sources that can help achieve the desired objective, including information about people, such as Personally Identifiable Information (PII).  After all, PII is just a class of information, which in many cases can enhance the quality and value of products and services.

But PII is unique in that because it pertains to individuals, it is increasingly subject to a wide range of obligations, whether regulatory, contractual or ethical.  The Chief Privacy Officer is tasked with implementing the policies, procedures and controls around how PII is handled within an organization.

Since the scope of a CPO’s role is to manage compliance for information tied to individuals, and the CDO’s responsibility is around governing and managing the full body of enterprise information, it follows that the CPO responsibility is a subset of the CDO’s responsibility.

Bringing the CDO and CPO together

Traditionally, the CPO sits in the legal and compliance area of organizations, which positions them well to focus objectively on the treatment of the information, looking at it through a legal lense.

In last several years with the rapid growth of data science, there has been a significant refocus on how information is used in organizations, with the increased recognition of the benefit information leverage can bring. Organizations have responded by hiring data scientists and appointing CDO’s located within the business side to focus on leveraging information as an asset.

Having the CDO be organizationally separate from the CPO increases the challenges to have them collaborate, and raises compliance risk. Instead, having the CPO within the Office of the CDO — or even be the same person — provides the opportunity to leverage information with compliance built in, with clear accountability to operational leadership.

Why is this better?

Merging the CDO and the CPO roles provides organizational clarity around the commitment to pursue the opportunities data provides, while highlighting and recognizing the importance of respecting the compliance obligations.  The CDO should be equally conversant in business goals, and the data vision and strategy as they are in the data privacy program.

In addition to the positive optics around emphasizing the importance of privacy, this model embeds privacy in the fabric of operations, not as an after-thought.  It enables the goal of implementing Privacy By Design, and a Privacy Impact Assessment (PIA) becomes a “punctuation mark”, not a major activity.

Checks and balances

To be sure, colleagues (in Risk and General Counsel’s offices) would point out that a benefit of separating the CPO from core business operations is that it helps ensure organizational objectivity and independence, supposedly reducing the chances that privacy requirements can be deprioritized relative to revenue objectives.  But I would argue it happens anyway, in part because the separation raises the risk for privacy to be an afterthought. And implementing privacy requirements as an afterthought (or even just later in a project) greatly reduces the chances of success, while increasing cost and extending timelines.

So there are two key relationships that need to be in place to help ensure the effectiveness of the Privacy program:

  1. Counsel: Privacy is a legal concern, so the CPO/CDO should have a strong relationship and connection to Counsel.  Even the largest organizations rely on outside counsel to supplement the skills of in-house counsel. This is a great idea and should be formalized.
  2. Internal Audit: The CDO/CPO should work with internal audit to make sure data handling is included in the scope of the audit plan.  If there is an ERM (Enterprise Risk Management) plan, data risks and mishaps should figure prominently.

Organizations that are pursuing data leverage, whether as a source of new revenue, or a way to improve products and services or as a way to optimize management decision-making, should consider the significant benefits of merging the data management and privacy capabilities, as it may lead to a stronger – and safer – program, more aligned with the business.

Contact me at james@jhoward.us