The widely accepted notion that personal data is the “new gold” has ushered in a wave of regulatory compliance obligations, both globally and domestically, under data protection laws like the EU General Data Protection Regulation 2016 (GDPR), California Consumer Privacy Act of 2018 (CCPA), and Nigeria Data Protection Regulation 2019 (NDPR). Organizations now face heightened pressure from informed customers, data subjects, and regulatory bodies to prioritize and invest in data privacy compliance.
Data privacy has evolved from being the sole responsibility of the Data Protection Officer (DPO) or the Information Security team. It has become a Board and governance issue, with regulatory compliance no longer just a checkbox exercise. This shift is particularly crucial given the increasing frequency of data breaches and their potential impact on an organization’s reputation and bottom line.
This article delves into the compelling reasons for Boards of Directors to actively engage in data privacy compliance and outlines practical steps to promote effective board participation in data privacy matters.
Moving Beyond Checkbox Compliance – The Board’s Active Role in Data Privacy:
For businesses across various sectors, personal data is a valuable asset. Consequently, protecting personal data is integral to a business’s sustained success. The Board of Directors (BoD), as the highest decision-making body, plays a strategic role in shaping the organization’s approach to data privacy. The BoD is tasked with setting the right tone at the top and exercising oversight regarding compliance with applicable data privacy laws and regulations.
In jurisdictions like Nigeria, where the maximum fine for a data breach under the NDPR can be as high as 2% of a company’s revenue, the BoD cannot afford to ignore data privacy. The potential consequences, including reputational risks, business disruptions, and loss of revenue, underscore the significance of prioritizing data privacy and protection.
Moreover, effective data privacy and security practices can directly influence sales. Building and maintaining trust with customers are critical for all businesses, and concerns about data security can significantly impact customer relationships. Thus, attention to privacy matters can potentially boost sales and, consequently, a company’s bottom line. BoDs should view expenditures on data privacy, information technology, and security as investments in the company’s growth rather than costs to be minimized.
In the age of data as the “new gold,” global regulations demand organizations to prioritize data privacy. No longer confined to compliance checkboxes, it’s now a Board and governance imperative. Boards of Directors (BoDs), recognizing personal data’s value, play a strategic role in shaping the organization’s data privacy approach. With hefty fines and reputational risks at stake, the BoD’s active engagement is crucial. Beyond risk mitigation, effective data privacy practices directly impact sales by fostering customer trust. BoDs must view investments in data privacy and security as vital contributions to the company’s growth.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.
