Disclosing a breach? Coordinate it with release of good news – study
Christopher Escobedo Hart writes that a well-handled breach can actually improve a company’s bottom line.
A recent study goes a step further, suggesting that if handled well a data breach can actually help the bottom line. This counter-intuitive conclusion, conducted by Sebastian Gay at the University of Chicago, is based on data from breaches occurring between 2005-2014. The paper finds that “firms manage to avoid the full negative effect of a privacy breach event disclosure by releasing on the same day an abnormal amount of positive news to the market.” In other words, sometimes companies have maintained a store of “good news” that they bundle together and release at around the same time that they disclose a data breach, which not only offsets the negative effect of the bad news of a data breach, but actually increases the bottom line.
Read more on Foley, Hoag Security, Privacy and the Law.