As technology continues to revolutionize the way the world does business, a new breed of corporate official is emerging in Los Angeles: Chief Privacy Officer.
The latest abbreviation to enter the executive suite, CPOs do everything from developing privacy policies and ensuring corporate compliance with privacy-related laws to lobbying Congress and protecting companies from online espionage.
The trend stems largely from growing consumer concerns about how companies are using and in some cases abusing confidential personal information.
There are only about 100 CPOs in the nation right now. Among companies that have hired such officials are EarthLink Inc. and the Walt Disney Co.
The first companies to employ full-time privacy czars were Internet-based firms, according to Richard Purcell, director of corporate privacy at Microsoft Corp. But the trend quickly spread to other business sectors after US Bancorp hired its first privacy officer in August 1999 to reassure its customers that their personal information was secure after the Minneapolis-based bank was sued by state regulators for selling confidential financial data to telemarketers.
Since then, some of the nation’s biggest companies have scrambled to add privacy officers to their rosters. Among them are Amazon.com, American Express, Hewlett-Packard Co., Citigroup, Prudential Insurance, Equifax, Bell Atlantic, PriceWaterhouseCoopers, Dunn & Bradstreet, AT & T; and IBM.
EarthLink became the latest company to join the trend when it appointed Les Seagraves as its first CPO in December. As with their counterparts at other companies, EarthLink officials see the appointment of a full-time privacy officer as a smart business and public relations decision.
“EarthLink is determined to lead the Internet service provider industry in protecting consumer privacy,” said CEO Gary Betty. “Companies must accept this responsibility and Les Seagraves has the knowledge and experience to create a comprehensive environment of consumer trust.”
Seagraves works out of EarthLink’s Pasadena and Atlanta offices.
Meanwhile, Alden Schacher was hired as the Walt Disney Internet Group’s first full-time privacy officer last June, according to Michelle Bergman, the company’s spokeswoman. Bergman said that Schacher will continue to serve as CPO for the company despite Disney’s just-announced plans to shut down its Go.com Internet portal and convert the Internet Group back into a division of the parent corporation as of March 20.
Microsoft’s Purcell said these high-profile CPO hirings should open a lot of eyes in the L.A. area and across the nation about the need for full-time CPOs to protect company interests and ensure consumer trust.
Alan Westin, president of the Center for Social and Legal Research and publisher of the American Business and Privacy magazine, said he expects the number of CPOs in the country to grow exponentially, as more companies are subjected to privacy-related lawsuits.
Other industry analysts agree.
“We’re seeing about one or two new positions being filled every week, said James Grady, analyst for Giga Information Group. “And many of the companies that have not yet hired CPOs either have someone fulfilling that role or are transitioning someone into that position.”
Grady added, however, that the position is difficult to fill because CPOs must have wide-ranging qualifications.
“In addition to understanding technology, marketing and public relations,” he said, “they also need to have a legal background because one of their main roles is to create policy.”
Because the CPO position is so new, its duties are still being defined at many companies.
Seagraves said that CPOs must possess great managerial and interpersonal skills because they have to interact with employees in every department in order to understand and monitor how information is flowing throughout the company.
“Typically, a CPO has to be a Renaissance man,” Grady said.
CPOs rank pretty high in the corporate pecking order.
Seagraves reports directly to EarthLink’s CEO Gary Betty and President Mike McQuary; Schacher reports to Disney General Counsel Larry Shapiro; and Purcell reports directly to Microsoft’s COO Bob Herold and works closely with Bill Gates.
Both analysts and CPOs see the position as a permanent one.
“Our ability to trade and exchange personal information is only going to increase as technology gets more sophisticated,” Grady said, “Companies that do not have one focal person to direct all privacy-related matters are really opening themselves up to public relations disasters and violating the trust of their customers.”
