A recent study ranks information compromise and terrorism the top executive worries, trumping "traditional concerns" like product recalls.
Posted Dec 26, 2006
Most organizations, at some point, will have some kind of a crisis they must respond to. According to a study conducted by Harris Interactive, business leaders are most worried about data security and terrorism. The findings, based on the firm's Internet-based survey of 197 senior executives of large corporations--those with revenue surpassing $1 billion--are discussed in detail in the December 2006 issue of The Harris Report.
The compromise of corporate information systems outpaced all other crisis situations: 61 percent of respondents revealed that data security is one of their top worries or a major worry. One of the reasons why data security is such a prevalent concern is the due to the amount of information that companies are held accountable for and the consequences associated with failing to safeguard that data. Security gaffes can have a damaging influence on consumer trust and company reputation, according to Mike Dabadie, division president of Harris Interactive's brand and strategic consulting practice. "In today's economy you have businesses that are responsible for quite a bit of information not only internally but also externally."
More than half--55 percent--tapped terrorism as a top concern. "The fact that, more than five years after 9/11, more than half of business leaders are still worried about terrorism is a significant finding," Dabadie said in a written statement.
The remaining top worries of corporate executives include:
Negative financial news about the company: 45 percent
Corporate malfeasance: 40 percent
Litigation against the company: 40 percent
Negative news about the workplace or business practice: 39 percent
Environmental mishaps: 32 percent
Unexpected corporate leadership changes: 31 percent
Negative claims about product health or safety: 30 percent
Internet rumors and misinformation: 29 percent
Industrial accidents: 24 percent
Product contamination or tampering: 23 percent
Product recalls: 21 percent
Workforce violence: 19 percent
Strike or work stoppages: 16 percent
"If you look at the results that we got back, what's further down the list is what I would call traditional concerns that a CEO or a corporate officer may have," Dabadie says. "What's actually highest on the list are more macro effects that are out there. Terrorism, data security breaches--it's all going back to an issue of trust at a very large level."
Additional findings reveal that crisis management plans are popular with almost three-fourths of respondents; 74 percent (146 respondents) work for companies that have a crisis management plan in place. However, 60 percent of those respondents have never had to use any component of the crisis management plan. Of the 40 percent that have, however, 85 percent have been satisfied with the way the plan performed, according to the survey.
Perhaps not surprising, though, communication, training, safety/security contingencies, improving privacy breaches/Internet security, and monitoring were the most cited activities for minimizing risk (using as a base all respondents). Dabadie, adds, however, that companies must think through issue management versus reputation management. Issue management is a more reactive approach whereas reputation management is a "proactive, benefit-driven strategy that focuses on and communicates a company's core strengths," the report says. "Executives that employ this strategy must understand and continually reinforce the positive, personally relevant benefits behind their brand and organization to key stakeholders and influencers."
Security Costs E-Commerce $2 Billion in '06
IT Security Will Become More Proactive
Hackers Hit AT&T Customers