Gambling on Assumptions: Ensuring Data Policies Align With Operational Reality

data policies
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Gambling has been legalized in North Carolina. You can bet on everything from NBA basketball to Chinese Formula 1 Racing. But do you want to gamble on your company’s data privacy and cybersecurity? In the digital age, companies are increasingly reliant on robust data policies to navigate the complexities of managing and safeguarding their assets and those of their clients and vendors. Yet, despite their best efforts, many organizations are grappling with a sobering reality: the divide between what their data policies say and what actually occurs. This difference raises critical questions about the accuracy, privacy, security, and integrity of data management.

Policies vs. Operational Reality

Data policies are the backbone of an organization’s data governance framework, outlining requirements for data use and disclosure. Crafting these policies involves a balance between regulatory compliance, data security and operational efficiency. Organizations may create a facade of control, assuming their policies accurately reflect the ground truth of data management practices. Organizations often believe taking the time to create this data privacy framework is enough.

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Reality differs, as these policies and practices should be regularly reassessed. The dynamic nature of technology infrastructures, evolving business processes, and human factors create discrepancies between policy mandates and operational realities. Contrary to policy statements, data may be shared through unsecured channels, stored on unauthorized devices, or accessed by personnel without authorization. These discrepancies undermine compliance efforts and expose organizations to significant legal, financial, and reputational risks.

Misalignment Repercussions

The misalignment between data policies and operational reality causes repercussions that are multifaceted and far-reaching:

Legal/Regulatory Compliance: Non-compliance with regulations (e.g. GDPR, CCPA, or HIPAA) can result in hefty fines, litigation, and damage to corporate reputation. Failure to adhere to stated policies can impact regulatory audits, due diligence reviews, and legal proceedings.

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Data Breaches: Gaps between policy and reality, create vulnerabilities. Data breaches compromise sensitive information and erode customer trust and confidence in the organization’s ability to protect their privacy.

Operational Inefficiencies: Misalignment can cause operational inefficiency and errors. Inconsistent data handling practices may hinder collaboration, decision-making, and strategic planning, undermining the organization’s competitive advantage.

Loss of IP: Inadequate data controls increase the risk of intellectual property theft compromising the organization’s innovation and market position.

Reduced Value: When an organization seeks funding, loans or other financial commitments and when they engage in business transactions, including M&As, the value of the organization can be significantly, negatively impacted by not managing the consistency of policies with actual practices.

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Strategies for Alignment

When addressing the misalignment between data policies and operational reality, organizations should adopt a proactive and holistic approach:

Conduct comprehensive audits and assessments to evaluate the effectiveness of existing data policies and identify gaps or inconsistencies between policy mandates and actual practices.

Invest in robust employee training programs about data policies, security protocols, and compliance requirements. Foster a culture of accountability and responsibility across all levels of the organization.

Implement technology solutions such as encryption, access controls, and data loss prevention systems to mitigate the risk of unauthorized data access or transmission.

Deploy monitoring tools to continuously monitor data flows, access patterns, and security incidents in real-time. Enforce strict controls and penalties for violations.

Recognize that data policies are not static documents but living frameworks that require regular review, iteration and adaptation.

The misalignment between data policies and operational reality poses significant challenges to organizations. By acknowledging and addressing this disconnect, organizations can enhance data governance, mitigate risks, and build a foundation of trust and integrity in their data management practices. Only through a concerted effort to align policy with reality can companies truly safeguard their most valuable asset – their data.

Joe Dickinson

Joe is senior of counsel in the Raleigh office of Kaufman & Canoles where his practice focuses on information governance, data use, privacy, and cybersecurity. With more than 30 years of practice in the industry, his background in technology and cybersecurity, he has successfully advised and guided clients, globally, country through the intricate landscape of data protection regulations and risk mitigation strategies. Joe also has more than 15 years in general counsel and in-house roles including chief privacy officer and CISO. Contact Joe at (984) 222.8113 or [email protected].

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