What Role Does the Board Play in Trust Management?
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In recent years, data has become increasingly valuable to organizational growth. Amid new and emerging technologies, the expansion of third-party vendor relationships, and the incalculable proliferation of personal data, what role does the Board play in trust management to guide their organizations into the future of data management?
In a special edition of The Privacy Collective, RadarFirst CEO Don India met with Dominique Shelton Leipzig, Partner at Mayer Brown, who spoke on Boardroom Breakthroughs and Innovations in Trust Management. The session focused on why Board leaders should prioritize trust and how organizations that succeed in doing so will see value in the long term.
In this session, we explored:
- Board-level conversations about data privacy and data protection
- Threat landscapes for companies
- Digital trust and its role in corporate growth
- Data innovation and enterprise growth
- Reporting on data privacy and protection to the board
Key Takeaways
Takeaway 1: Data privacy and data protection have become Board-level issues due to significant financial losses and growing concerns among consumers.
In the past year, issues of data privacy have cost NASDAQ-listed companies over $1.4 trillion in market cap losses, while data protection issues rose above $6 trillion.
Together, those two issues, data privacy and data security have cost our global economy over $8 trillion.
In the past year, issues of data privacy have cost NASDAQ-listed companies over $1.4 trillion in market cap losses, while data protection issues rose above $6 trillion.
“Put another way, if that were not losses, but rather GDP, that would be the third largest country in the world behind the US and China. We’re starting to see this turn into an enterprise risk issue and at the Board and CEO level,” said Dominique.
She also mentioned the growing concerns among individuals regarding their data privacy, “I read a projection that by the end of 2026, the spend on digital innovation transformation, including AI and all other kinds of emerging technologies is going to get up to 3.4 trillion. And at the same time, we have a situation where three out of four individuals worry about their data privacy, so we’ve got to tackle both digital innovation and trust at the same time at the enterprise and C-level.”
“… we’ve got to tackle both digital innovation and trust at the same time at the enterprise and C-level.” – Dominique Shelton Leipzig, Partner at Mayer Brown
With the increasing adoption of emerging technologies, it’s crucial for companies to address these concerns and establish trust with their customers and employees before disaster strikes.
“Understanding of how the proliferation of these different technologies actually allows for a proliferation of additional threat landscapes that can impact our companies,” she said.
Takeaway 2: National security should be considered in the risk assessment for data privacy and protection.
National security plays a significant role in the threat landscape for data privacy and protection. Companies need to consider themselves as potential targets in the global geopolitical context.
Dominique emphasized the importance of understanding how these tools can be used by adversaries: “It’s really interesting because many of the corporations I speak with think about things in terms of the financial impact to the corporation and maybe industry and global trends, but thinking of themselves as geopolitical targets.”
Companies should take a proactive approach to ensure data privacy and protection to mitigate national security risks, and this includes utilizing external resources and support to create a thorough risk assessment.
“Having tools to assist with <risk assessment> is very important because in order for companies to create a thorough risk assessment involves both the legal and national security as well as industry trends to be able to really get a sense of where the risks might lie and getting together, not just trying to do it all alone, getting the resources available through outside support is extremely important,” said Dominique.
Takeaway 3: Building digital trust is essential for businesses to grow and maintain customer loyalty.
Companies need to focus on building digital trust, ensuring they are responsible stewards of their customers’ and employees’ data. According to Dominique, “Companies should not tether themselves to the minimum of what the legal requires, but to at least understand what is legally required to ensure no violations of law.”
“Companies should not tether themselves to the minimum of what the legal requires, but to at least understand what is legally required to ensure no violations of law.” – Dominique Shelton Leipzig, Partner at Mayer Brown
CEOs and board members need to lead by example, setting the tone for the entire organization and emphasizing the importance of trust and responsible data stewardship. By building a strong foundation of digital trust, companies can create new opportunities for growth and maintain customer loyalty in the increasingly data-driven world.
Dominique spoke about the importance of being transparent and establishing trust: “The opportunities for companies to soar with their data are really infinite if we take to heart the lessons learned from web 1.0 and 2.0 and really look ahead for web 3.0 and post-pandemic to be data leaders with trust.”
“Waiting a whole year to get together with the board on new technologies might be way too late to avoid pitfalls and also to avoid missing opportunities that could be achieved if the data could be leveraged.” – Dominique Shelton Leipzig, Partner at Mayer Brown
Comparing the organizational status quo to a goal state, Dominique shared key opportunities for strategic discussions among strategic leadership meetings and auditing committees. She shared that discussions should include data privacy, data security, and new paradigms around the governance of AI and other emerging technologies.
“Normally innovations that took seven years to develop are now taking three months. So waiting a whole year to get together with the board on new technologies might be way too late to avoid pitfalls and also to avoid missing opportunities that could be achieved if the data could be leveraged,” she shared.