Breach notification laws and the growing globalization of business operations are forcing U.S. companies to pay more attention to the risks associated with having sensitive personal information under their control, according to Harriet P. Pearson, vice president of corporate affairs and chief privacy officer at IBM. Minimizing those risks is a challenge that requires a truly cross-functional effort involving security, technology, legal, audit and marketing organizations. In an interview with Computerworld, Pearson - who is responsible for guiding information collection and use policies across IBM - talked about some of those challenges.
What's driving the privacy agenda today? What do CIOs and CEOs need to understand about data privacy and protection?
CIOs, security people and privacy people are now working closer than ever before. The precipitating event that has brought them closer together has been this requirement that started in California and has now appeared in about 25 additional states to disclose to consumers if there's a security incident that potentially compromises data about them. That simple thought differently expressed in different laws, but now becoming pretty much standard operating procedure, is very much on the minds of the security, privacy and CIO folks that I've been talking to. Depending on the industry and depending on the type of CIO, it varies a little bit. But to a person, they are all aware of the challenge of responding to the requirements of these laws.
What sort of challenge does this pose for companies?
There is no doubt that this new set of requirements around security breach notifications [is] now a high-priority item for security and privacy managers and the CIO. Part of the challenge is that there are 25 states [with breach notification laws]. If you look at each of them, you will see that each one is slightly or significantly different, and that does cause challenges. It creates the requirement that if you are doing business across states, you have to go through and try to rationalize them across states. So what kind of information is covered by the law that you have to comply with? There are different definitions of personal information across states. The triggers that require you to notify differ across states. And you have to figure out what the company is comfortable with using as a trigger. Because if you are doing business across the country, basically, I don't think you are going to sit down and [say], "Well, if it happened in Arkansas versus ... California, I am going to use radically different standards." The types of notices differ. The states are using different language [relating to] where you have to put it and who must be notified. I think the more interesting and very significant development here is that nobody wants to become really good at knowing how to notify when there's a breach. It's not a recipe for job success here. So I think what's happening is that at some level, the CFO or the [chief risk officer] or the compliance officer or somebody is going to turn to the CIO and say, "How do we stop this?"
What is your personal opinion of breach notification triggers as they exist today?
I have an analogy that I use. In the 1980s and the 1990s, I was an environmental lawyer, and I was in California around that time when a law called Proposition 65 was passed. What happened was California required businesses to make disclosures of the release of chemicals and stuff like that. When you are actually required to disclose those kinds of things, it changes people's behavior. But you want to be careful and strike a reasonable balance. I don't know exactly what the formulation of language should be. If it is too [restrictive], you are going to get too many warnings, and it's going to result in overnotification.
You were part of an effort by the International Association of Privacy Professionals (IAPP) to create a certification program in information privacy for government officials. How will such a certification help?
Well, the basic idea is this: If you are managing data inside a company, what do you need to know? They don't teach this stuff at school. Maybe someday they will, but right now, there's not a whole lot of master's in privacy or master's in how you become a privacy officer. What we did at the IAPP was to say these are professional people who are actually responsible for doing this work. It helps raise the level of awareness and professionalism throughout.
What makes a good privacy officer?
What are the qualities that you would be looking for in your successor, for instance? Multidisciplinary thinking and attitude. Why do I say that? Because you have to work very closely with and understand the world of the CIO, the security officer, the risk and compliance function, legal, marketing, communications. So anyone who is disposed to think of business in a silo mentality need not apply. [Also important are] a willingness to learn [and] a passion for striking balances that both protect the brand and reputation of the company and that respects the individual and meet their expectations. I don't think there's a single source of where to find those kinds of folks.
To whom in the organization should the privacy officer be reporting?
In terms of a reporting structure, it depends on the company culture. I've seen it reporting into legal, into compliance, into the CIO, into marketing. I've reported to a couple of different areas myself. At the end of the day, because it is cross-disciplinary, it is for the senior managers of the company to help set a course that helps the privacy officer and the team that works on these issues to strike the right balance. I don't think the privacy function should be with the CIO. But the CIO is a partner and is key, key, key.
In a sense, is it even harder for privacy officers to get the recognition they deserve within an enterprise compared to security managers?
It depends on the individual and the company strategy. I do think that when things happen in the world, in the outside environment, that creates change, it falls on leaders inside companies to lead the way. So instead of worrying about how much respect you get, I would turn it around and my attitude and my advice would be look at the challenges posed by a globalizing world - a world in which lots more data is under your management and where the expectation is you are going to be very transparent about how you manage the information. Now, take those forces and be strategic in how you help your company meet its objectives. And I daresay you'll be respected, because every company probably wants, as part of its objectives, to deliver a consistently excellent experience to its customers and its clients. And if you are going to be doing that, you are not going to have security breaches that you are going to be notifying customers about, and you are going to be treating your customers with respect.
Reprinted with permission. Copyright © 2006 by Computerworld, Inc., Framingham, MA 01701 All rights reserved.
Harriet P. Pearson, vice president of corporate affairs and chief privacy officer at IBM.