Aug 17 2009
Sigh. I’d figured this out on a gut level some time ago, but it’s disheartening to see it actually put down in writing: A security breach won’t affect a company’s reputation in the long term. Or even that much in the short term. If the TJX compromise taught us nothing else, it’s that the average investor doesn’t follow the breaches or doesn’t care about the impact a company’s security has on it’s customers if they do. TJX actually used their compromise as a marketing opportunity and showed a minor uptick in business after the compromise.
As Larry Walsh points out, reputation fluctuates by a company’s actions and security is only a minor part of reputation. Based on what we’ve seen historically, it’s only a very small part, which is incredibly sad. People either don’t understand or don’t care about what a breach is going to do to their privacy and credit.