Blog Archives

Regulatory Flaws

I learned many things working for an former DOJ attorney but the thing that stands out the most is his savvy when it came to predicting what organizations would do in given situations. Legal regulations and contracts produce the same effect in businesses: do the minimum to get by aka comply.

Doing only what you have to, will catch up to you in one form or another. This minimalist philosophy is infectious. Take for example the rampant security breaches of the 21st century. Hackers unite!

Companies of all size grow and extend their business in order to satisfy their customers. If the company is publicly traded, then the company also seeks to please its stockholders. If security was a priority, companies would solve the data breach problem voluntarily. There are any number of reasons for security being what it is today.

We don’t need regulations in order to promote and achieve security within organizations, rather courage and leadership are needed. Security is not a profit-center, it is risk-avoidance; just like insurance. No one buys insurance (except maybe Allstate’s insurance) expecting to make money, insurance protects you against loss [whatever form that loss may take] but the insurance is only as good as the language in the policy. Security is no different; however, a company can reduce the cost and improve the effectiveness of security by including it throughout the organization and by building it into products and services instead of adding it on after a data breach has occurred. Unfortunately, too often security is implemented in the form of damage control following an incident because little financial justification can be made in advance of such an incident.

Regardless, politicians’ calls for “stronger” regulation are predictable because “stronger” regulation is “better”—in a press conference. In the real world, however, regulation is no more capable of divining threats to data security than, say, a common law liability regime, or even businesses’ natural interest in maintaining their operations, integrity, image, brand, and assets. [CATO]

Businesses will stay ahead of both the law and law breakers if strategy, business processes, and the big picture replace procedural band-aids, reactionary planning, and cost as their chief motivators. [ITCI]

If all that fails, you can still buy insurance!