MacLaren’s cloud-based digital asset management company, MediaValet, had grown and spread around the world. With customers in Europe, he knew he had to comply with the European Union’s General Data Protection Regulations (GDPR) – the new global gold standard when it comes to privacy – or face the prospect of hefty fines.

It was a challenging process that took six months. But MacLaren says being among the first North American companies to become GDPR compliant has made a big difference. “It has attracted new customers, increased customer retention and overall grown our business. It has increased market share because it helped us win deals from other existing digital asset management providers.”

In the wake of the Cambridge Analytica scandal and with the GDPR’s entry into force in May, privacy issues and ethical questions about what companies do with the data they collect have been in the spotlight.

In October, Apple CEO Tim Cook issued a call to action. He warned that privacy was a human right and the collection of huge amounts of personal information on individuals was hurting society.
“Our own information, from the everyday to the deeply personal, is being weaponized against us with military efficiency,” Cook told an international gathering of privacy commissioners.

Cook praised the GDPR and called on the United States to follow Europe’s lead.
While California has adopted a consumer privacy act that is scheduled to go into effect in 2020, privacy laws in the U.S. are often weak or nonexistent.

Canada has the Personal Information Protection and Electronic Documents Act (PIPEDA), which governs private businesses, and the Privacy Act, which spells out the rules for federal government departments, but neither has kept pace with changes in technology. With the GDPR now in effect, some experts are concerned Canada’s privacy laws will soon no longer be considered equivalent to those in the EU, which could complicate life for Canadian companies doing business with European companies or customers.

Described as the world’s strongest data protection rules, the GDPR sets out how the private information of European residents must be handled. It backs up those rules with the threat of stiff fines – up to €20 million or four per cent of a company’s worldwide annual revenue for the previous year, whichever is higher.

Fines can be imposed on any company around the world that breaks those rules – even if it has no offices in Europe.

European officials told Reuters in October that there has been a 53 per cent increase over the past year in privacy complaints under the GDPR in France and Italy alone. They expect data protection authorities to soon begin levying fines.

European data protection authorities can also use order-making powers to enforce the new privacy rules.

[pullquote]

“Our own information, from the everyday to the deeply personal, is being weaponized against us with military efficiency.”

-Tim Cook, CEO, Apple

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For example, the United Kingdom’s Information Commissioner, Canadian Elizabeth Denham, has issued an order directing a British Columbian company involved in the Cambridge Analytica scandal to destroy all the personal information it collected on British citizens once B.C.’s information commissioner’s office finishes its investigation into the scandal.

The GDPR’s new rules are wide ranging.
One of its key provisions – privacy by design – actually originated in Canada, the brainchild of former Ontario privacy commissioner Ann Cavoukian. With privacy by design, privacy considerations are baked into systems from the start, not added as an afterthought.

Companies that have a data breach must notify affected customers within 72 hours of becoming aware of the breach. Businesses must ask people, using clear language, for consent to use their information. Individuals can withdraw that consent, and request access to information a company has regarding them. They can take their data with them if they switch to another company.

Among the other provisions is the right to be forgotten, which allows an individual to ask for information about them to be erased.

Canadian Privacy Commissioner Daniel Therrien says the GDPR is inspiring privacy policy in other countries.

“Should we apply the GDPR exactly in Canada? Not necessarily. I don’t think so. We have a Canadian context. But there are many, many positive things in the GDPR.”

Scott Smith, senior director of intellectual property and innovation policy for the Canadian Chamber of Commerce, says many large Canadian companies that operate internationally have already moved to comply with the GDPR.

However, he said many smaller companies don’t yet realize that they may need to comply as well.
“You run an Airbnb. You have a European traveller who happens to be here. You keep their name, their address, their e-mail address and phone number – that’s all personal information of an EU citizen. Theoretically, you need to be GDPR compliant.”

The GDPR comes at a time when data and personal information have never been more valuable.

“I’d say it is paramount,” says Smith. “Data is the way we are going to create new products, solve problems. Having timely, accurate and extensive data allows companies to understand their market, understand their customers, understand what their customers want and deliver it in ways that are more efficient and effective and convenient and lowers prices.”

Elisa Henry, a partner with Borden, Ladner, Gervais, says that for many companies, data has become their main asset.

“If you don’t properly take care of your data and you don’t handle it properly, then you’re putting your main assets at risk.”

Being GDPR compliant is rapidly becoming an asset when it comes to sales and business deals, Henry adds.

“If you cannot say that these days and your business is relying heavily on processing personal information, then you’re out of the game very quickly.”

Chantal Bernier, who leads the privacy and cybersecurity practice at the law firm Dentons, says companies could also have difficulties exchanging data with European businesses if they aren’t GDPR compliant.

“In the GDPR there is a mandatory requirement for any organization to only transfer data or to only hire a vendor that is GDPR compliant. So in addition to the competitive advantage with branding, there is a legal requirement that is a huge differentiator when you can put forward right away that you are GDPR compliant.”

The cost of complying can vary widely, says Bernier. A small website selling products to Europe might be able to comply with the law for $50,000. A larger company that uses artificial intelligence, algorithms, a large amount of personal information, has European employees and sells services to Europe could end up spending hundreds of thousands of dollars to do everything necessary.

Cavoukian, who now leads the Privacy by Design Centre of Excellence at Ryerson University, says a lot of businesses have been coming to her for privacy by design certification that they can then tout to their customers.

Many of the provisions of the GDPR highlight ethical questions for businesses – even those who don’t do business in Europe.

Among them, says Henry, is the use of artificial intelligence and entirely automated decision-making or profiling that affects individuals – something restricted under the GDPR.

“There are a lot of questions that as citizens we should be asking and ethics has to be embedded in privacy. They go hand in hand. And the GDPR suddenly played a big role in raising awareness about that.”

In Europe, the new, tougher rules are being well received, she added. “People are more and more conscious and worried about surveillance, about monitoring of their behaviour, about automated decision-making.”

Another ethical issue for business is the temptation, once you have a database chock full of personal information, to use it in a variety of ways.

Cavoukian says it is important to make privacy the default setting and not to use information you gather for any purpose other than the purpose for which it was collected.

“The beauty of doing that is that it builds trusted business relationships, which are lacking. There’s a huge trust deficit,” she says.

“So, I actually believe it gives businesses a competitive advantage and allows them to retain the customers they have, gain their loyalty and it attracts new opportunity.”
MacLaren agrees.

He says the most challenging part of becoming GDPR compliant was reviewing all of the company’s licensing agreements with their lawyer. That review and making sure all aspects of MediaValet’s operations complied with the GDPR cost “north of six figures.”

But MacLaren is glad he did it.

“In the end, if it’s good for our customers and their users, it’s good for us and our businesses.”

Elizabeth Thompson is an award-winning journalist who has covered Canada’s Parliament since 2001.

The post Privacy profits appeared first on Corporate Knights.

A prolific writer – he has written more than 150 articles and 15 books – Mintzberg is considered one fo the most thoughtful, provocative and critical thinkers on management. And, from an economics perspective, he asserts that our global economies are out of balance and tilted too much in favour of the private sector. The result is an unsustainable path gripped by political paralysis. The answer? Mintzberg calls for a radical renewal that brings the public, private and plural sectors – the latter representing non-governmental organizations and member-owned businesses with each other. This, he argues, will lead to responsible business, respected government and robust, interactive communities. Corporate Knights first interviewed Mintzberg in 2009. Below is an excerpt from a more recent chat that took place in the fall:

CK: When you say you believe in something because it’s impossible, what do you mean by that? What inspires that?

MINTZBERG: All change seems impossible, but once accomplished it’s the state you’re no longer in that seems impossible. You can look back and say, how did we ever tolerate that? How did the Americans ever tolerate an electoral college and how could they have tolerated the process by which a minority of voters can put someone in office?

CK: You’re working on a new book, to be released this year, that hits on topics such as balancing society, radical renewal, and moving beyond the left, right and centre. Can you give us some insights into what your core thinking is with this new work?

MINTZBERG: What I’m arguing is that since 1989, after the fall of the communist regime, the assumption was that capitalism had triumphed. I think that was a mistake. I think that balance had triumphed in the sense that we (the western world) were roughly in balance and that the eastern European countries were totally out of balance on the side of the public sector. Because we misinterpreted that, we are now swinging out of balance in the private sector – that is, cutting regulation, reducing taxes on the wealthy, the amount of tax increases in regressive taxation like sales tax. So we’ve swung out of balance and what I’m saying is a balanced society leads to responsible businesses, respected governments and robust communities, or what I call the plural sector.

CK: What is the role of large corporations in this rebalancing?

MINTZBERG: I don’t think companies are going to solve this problem. Responsible corporations will not make up for irresponsible corporations. There are too many irresponsible corporations. I applaud the responsible corporations but green retailing is not going to make up for greedy drilling. So social responsibility contributes and it’s important, but it’s not going to be the starting point or the main point. On the other hand, I think it comes in once plural-sector organizations, through social initiatives, show the way. So what you have today are thousands of fascinating social initiatives all over the world based on microfinancing. These didn’t confront banking, they went around it. They created a way for people who couldn’t get loans to get loans. That’s an example of social initiative. Once that starts happening – and you see this with microfinancing – then the regular banks can say maybe we can do that, too. You get responsible reforms.

CK: I guess this is a bit of a loaded question, but would you say financial capitalism has been more parasitic than symbiotic with respect to the planet and society?

MINTZBERG: Unbalanced, probably yes. I’m not sure the word parasitic is the right word, but yes. My vocabulary is to compare exploring corporations with exploiting corporations. Exploiting and parasitic mean the same thing. Apple would be a classic example of an exploring corporation that contributes enormously and in fascinating ways and does extremely well, although it also does its share of exploiting in certain respects. But there are too many exploiting corporations.

CK: There are some global initiatives, led by big corporations, which are aiming for the highest common denominator policies – i.e., policy changes that lead to market rewards for responsible leaders and increase market costs for the laggards. What do you think of this approach?

MINTZBERG: It sounds fine. But there are a couple of things. One is that the smaller companies behaving responsibly may not get the publicity that the bigger companies would get, so they may be at a disadvantage in that perspective. The other thing is that you can build up goodwill and blow it in an instant with a new mercenary chief executive who starts exploiting. Delta Air Lines was revered years ago for the treatment of their employees and look what happened? The trouble with working for a company today is that no matter how good it is, like Johnson & Johnson, you don’t know if some new mercenary is going to take over and just kill it in a year or two. It happens so often these days with executive bonuses and stock market forces.

CK: This seems a pretty good reason to improve the rules of the game – to rebalance, as you might say.

MINTZBERG: Right now it seems to me that it pays to be good. The trouble is that it also pays to be bad. You can make a lot of money being bad, and by bad I mean the letter of the law. Bear in mind, too, the company may be destroyed in the long run by irresponsible behaviour. But the chief executives are walking out with massive bonuses before that happens. So it pays the chief executive to be bad, but it doesn’t pay the corporation in the long run.

The post Getting back in balance appeared first on Corporate Knights.

The Occupiers need hardly add their voices to those from time immemorial against the hardy perennials among public grievances, such as age, sex, racial and orientation discrimination. And it is not clear what they are complaining about in respect of an alleged monopoly in farming, sophistical legalities, the sale of privacy of the public (as a “commodity”), “colonialism at home and abroad,” and “misinformation through control of the media.”

Less challenging to comprehension are complaints about torture and murder of prisoners and unspecified foreigners, and anger that student loans are not outright gifts, about the outsourcing of jobs, the nature and size of political donations, the alleged frustration of the development of alternative energy sources and the covering up of oil spills, and general complaints about Weapons of Mass Destruction.

This is the usual, incoherent, sophomoric grab-bag of populist grumbles, and there is some legitimacy to some of them. Also as usual, the protesters, led by the Canadian organization Adbusters and professional Canadian dissident Kalle Lasn, have been witty in sending up the pomposity of the system by adapting Thomas Jefferson’s Nuremberg-like indictment of poor old George III (but Jefferson’s blood libel on the American Indians that accompanied it) in the Declaration of Independence. It was a little like John Kerry’s anti-Vietnam protest at the Capitol in 1971, utilizing the most stilted Pentagonese jargon to describe demonstrations as “athwart hostile infiltration” of the Congress, and so forth.

Such an unfocused and scatter-gun assault is already pressing sympathetic buttons, and profiting from the usual heavy-footed public relations blundering of the municipal authorities and the straight-man impressionability of patronizing editorialists. Even New York City Mayor Michael Bloomberg, normally something of a fellow traveller with faddish protesters, has become quite belligerent, as he has paid for 10 years of municipal extravagance with the fiscal froth from Wall Street commissions and bonuses.

If the Occupiers and their organizers and spokespeople, including the capable Christopher Hedges (though he is now audibly verging on intoxication with the purple vapour of his own verbosity) and the unfeasibly abrasive Marxist mythmaker Naomi Klein, want to last more than a few weeks, they are going to have to do some strategic thinking and stop shouting long enough to acquire some tactical finesse.

To start, they must realize what they are opposing—there is no reason simply to excuse all student and other loans. The Occupiers don’t know anything about agriculture, privacy or colonialism. They would be insane to advocate unilateral disarmament, as the U.S. has used its WMD arsenal judiciously since (and before) Nagasaki; or to climb aboard the Global Warming bandwagon now that its wheels have left its axles in all four directions.

And they are going to have to do a lot better than their present counter-cultural, urban guerrilla reform plan: restoration of Glass-Steagall, more vigorous prosecution of financial criminals, reversal of the Supreme Court “Citizens” decision on electoral campaign financing by corporations, adoption of Warren Buffett’s tax proposals, restaffing and hyperactivation of the Securities and Exchange Commission, tighter rules against regulators becoming employees of those they formerly regulated, and the end of the “personhood” of corporations.

This too is just a rag-bag of simplistic liberal flummeries; Nancy Pelosi claptrap. An Occupation of Wall Street to monumentalize the already very imposing (at six feet, eight inches) Paul Volcker and to adopt the tax suggestions of one of Wall Street’s most ruthless and accomplished sharks, good old Uncle Warren in his viyella shirt and corduroy trousers (who paid less than $7 million on income of $63 million last year), is a piquant confession of the innocence of the Occupiers once they get south of Canal Street. And if they imagine that they are going to achieve anything desirable from the SEC, the supremely redundant appendix of American public life, or the under-worked, over- analyzed, colonnaded embourgeoisement of the American legal jungle complicit in the disappearance of the Bill of Rights into the sunset of simpler and more honest times, they are terminally naive.

Maybe start here…..

If the Occupiers want to be more than an evanescent magic carpet for a gaggle of hacks, gasbags and kooks, they will have to produce a leadership and a program worthy of being taken seriously as an alternative to what they are protesting against, and make alliances with other dissenters. Right now, they are just like the idiots who smash up the McDonald’s outlet at Davos each year, the anti-globalists at G7, G8 and G20 meetings, who are the football hooligans of political protest. They should stop invoking the fraudulent Arab Spring (now reduced to the massacre of Christians in Egypt and of Kurds in Syria) and attacking the Tea Partiers, who agree with them about bailouts, banks, monopolies and political corruption, and who got there first and have scores of congressmen and many millions of dollars. The Tea Party doesn’t have to try to run a Tentifada in Lower Manhattan to get any attention, and doesn’t need a publicity-seeking, gonzo, Marxist harridan like Naomi Klein as a drawing card.

They must leapfrog the Tea Party and not go to a war with it in a contest they can’t win. The Occupiers must recognize, as the Tea Party does, that capitalism is the only system that works, as it is the only one that conforms to the almost universal human desire for individual gain; and that the pursuit of gain will almost always, by its open-ended objective, lead to a crack-up eventually. Governments almost never have the least aptitude to deal with the resulting shambles, but there is no one else to do it, as governments make and enforce the laws, assess and collect and dispense taxes, and control the money supply.

The Occupiers must realize that they are not railing against a few crooked bankers and politicians, but against the American commercial, political, academic and media elites who have failed across the board. None of the central, lending or investment bankers, academic economists or financial media, or supposedly economically literate politicians saw this crisis coming, except for a couple of wingy professors and hedge fund managers, who took the concept of voices in the wilderness to Hansel and Gretel forest depths.

The Occupiers should denounce the shameful effort of the bipartisan political class to blame this mess exclusively on private sector greed, when it was the Clinton and Bush administrations that forced the financial industry into trillions of dollars of worthless real estate-backed securities in pursuit of higher family home ownership levels (and larger campaign contributions from the building trade unions and the real estate developers). The bipartisan political class had the brainwaves of outsourcing scores of millions of jobs while admitting tens of millions of unskilled, illegal migrants; and borrowing trillions of dollars from China and Japan to buy trillions of dollars of cheap and luxury goods (largely from China and Japan) that America formerly made for itself.

This was the strategic afterpiece of a country that had, in the two centuries from its founding in 1783 to the fall of the Berlin Wall, plotted and achieved a vertical and vertiginous rise from obscurity to global preeminence without the least precedent or parallel in the history of the world. This is the vortex the Occupiers seek to fill, and they won’t do it with Klein’s grating piffle; nor by importuning the SEC.

Even in the horrible year of 1968, scarred by the Martin Luther King and Robert Kennedy assassinations, race and anti-war riots, and Vietnam, Lyndon Johnson, Robert Kennedy, Hubert Humphrey, Nelson Rockefeller, Ronald Reagan and Richard Nixon were all, at one point or another, running for president. This year, as everyone knows, the likeliest challengers have passed and despite a very mediocre administration, there is no Democratic challenge to the incumbent as Gene McCarthy challenged LBJ in 1968 and Teddy Kennedy challenged Jimmy Carter in 1980.

The Occupiers should make common cause with the Tea Party and other reasonably sane protest movements. The way to cool out the obscene excesses of the financial community, and cut the domestic public sector deficit and unacceptable income disparities at the same time, is to tax optional financial transactions and certain categories of secondary financial income. The way to deal with poverty is with a self-reducing tax on very high individual net worths (let’s put Uncle Warren to the test). The tax could be accompanied by poverty-reduction programs designed and administered by the wealthy taxpayers themselves. The tax would eliminate itself as defined poverty was reduced and would directly engage the wealthiest people and most agile financial talents in the reduction of poverty, and give them an incentive to succeed. (Buffett’s proposals are a publicity stunt and if enacted, would not reduce the federal budget deficit by even one half of one per cent.)

Student and other loans should be restructured, the actuarial assumptions of Social Security adjusted, taxes simplified, labour strikes discouraged, and under-documented aliens enticed away from sub-minimum wage rolling of Hollywood tennis courts to win back jobs in simple manufacturing. (Whatever happened to Westinghouse alarm clocks?) And instead of grumbling about legal fineries, the Occupiers should demand the radical resurrection of the Bill of Rights that has been raped by lawless prosecutors with the fascistic plea bargain system, with the full complicity of the highest courts. The prosecutocracy should be put strictly back in its place and the addiction to over-sentencing, starting with the barbarism of the death penalty, should be reversed. The corrupt, misnamed (and decisively unsuccessful) War on Drugs should be ended, soft drugs legalized, treatment emphasized, and the laws applied equally to blacks and whites and poor and wealthy areas, and the effort to induce civil wars in other countries over supply (Mexico in particular) abandoned. The fable of global warming and the deranged nostrums that have come with it must also be abandoned.

A program including those elements would sweep the nation and impress the world. Christopher Hedges could think in these terms. If the Occupiers don’t have a burst of originality soon, they will be sent packing by the local police and will be neither remembered nor lamented.

The post Conrad Black on the 99% appeared first on Corporate Knights.

While I no longer have free reign in my friends’ photo galleries, being a digital outcast on Planet FB does have its advantages. For instance, my childhood friend who forfeited a certain reproductive organ after a seatless bicycle accident will now have more trouble tracking me down.

Of course, my symbolic act of excommunication does little to alter the age of radical transparency in which we live. Julian Assange will continue to operate the world’s largest unregulated drive-in movie starring naked Emperors. And half a billion people will collectively piddle away 700 billion minutes per month poking each other on FB.

We live in a world of web-enabled gawkers where everybody is fair game. Big Brother is watching us, but this time we are Big Brother, and we are watching “them” too. Outgoing Google CEO Eric Schmidt identified this reality when he told CNBC: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”

When it comes to our personal lives, I think privacy is a moral right and even a requirement for sanity, as long as it is not used as a cover to trespass against others.

With regard to corporations or governments, however, the more transparency the better because, to muddle Stan Lee’s phrasing: “with great power comes great transparency.” The social media boom has given a stronger voice to the public, and previously untouchable corporate entities are thrown swiftly in the hot seat if they mess up—especially if they do so in, say, the Gulf of Mexico. With the new virtual toolset consumers can speak a little louder, and businesses are sure to feel the punch if they don’t buck up.

Assange’s Wikileaks portends to Stan Lee’s dictum, but so far in an imprecise way, akin to fishing with dynamite. Advocates of transparency should instead go forth with ninja-like grace, equipped with exacting strategies of revelation to bring bad business and bad governance to light.

FB might in fact be educated on the way of the transparency ninja, making its money by collecting personal information from users and serving it up to hyper-targeted advertising campaigns—in essence corralling the many for the few.

No one is forcing FB users to pony up their personal information, but most information is given up through default settings that people don’t take the initiative to change. As behavioural psychologist Dan Ariely has demonstrated, given the propensity of people to eat what is served up, the majority of people tend to choose the path of least resistance.

What if FB corralled the few for the many? Mr. Zuckerberg has pledged to invest $3 billion pot (half his fortune to date) in strategic philanthropy, and while it may not be as profitable as FB, the following idea could merit investment.

Consider a FB designed for large corporations where any of the entity’s direct stakeholders could make updates. The web of relationships of the company would represent the full experience of their stakeholders—warts and all. Maybe FB isn’t the venue for it, but the sentiment is there: open and unmitigated communication.

If corporations had to work around the clock for the transparent approval of the broader public, with the tenacity of an orange-tinted Jersey Shore wannabe tagging themselves in a group photo at 3 am, the world might be a little more legit. It’s up to the stakeholders to demand a higher standard of their corporate suitors. And if companies live up to the demands of the public through sound, transparent reporting and a profound engagement with environmental, social, and governance issues, they may find themselves with a lot more friends. All for one, or one for all? All I know is Zuckerberg has 473 of mine.

brb,

Toby A.A. Heaps, Editor-in-Chief

The post A knight’s tale appeared first on Corporate Knights.