How Breaches Affect Reputation and Stock Prices- Valutrics

How are a company’s reputation and the value of its stock affected by a data breach? The answer to that question was the goal of a new study, “The Impact of Data Breaches on Reputation Share Value: A Study of U.S. Marketers, IT Practitioners and Consumers,” conducted by the Ponemon Institute and sponsored by Centrify. The study reveals that 45 percent of IT practitioners and 42 percent of CMOs do not believe their senior management understands the importance of preserving their company’s reputation. “To protect brand and reputation, it is critical for the C-suite and boards of directors to address consumers’ expectations and how their personal information is used and secured,” the report said. The study presents views of 448 executives in IT operations and information security, 334 senior-level marketers and corporate communication professionals, and 549 consumers. For the economic analysis of stock prices, the researchers selected 113 publicly traded companies that experienced a data breach involving loss of customer or consumer data. They created a portfolio of the stock prices of those companies and traced the index value for 30 days before the data breach was announced and 90 days following it. Here are highlights from the report.