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.

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.

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