Stopping Data Theft through the Back Door: Shifting the Duty to the Boardroom?

By: Sonny Zulhuda

The following is the abstract of the paper I presented (in a poster) at the recent 7th Asian Law Institute (ASLI) Conference at the International Islamic University Malaysia, 25-26 May 2010.

“In the information economy that relies heavily on the sustainability of information technology and the availability of data for business, data theft is equal to a catastrophe that causes massive losses to organisations. Authorities and technologists have put in place myriad of criminal laws and security tools to address this issue, only to see that the incidents of data theft become more rampant. The complications is because data theft involves a range of security issues, ranging from flawed physical control to a weak personal data management, from a single mistake of people on data processing, to a collective negligence of decision makers in the boardroom.

“In the context of corporation, the idea of holding the management board responsible is now increasingly attractive due to the fact that the victims of data theft would see a better chance of getting compensation. This is a rising trend on the law on data theft where certain duties are imposed on the management board of the companies.

“The law, as appears in some jurisdictions such as the US and the UK, obliges the board to exercise certain level of due diligence in managing data asset in the company. Besides, new laws impose duty on the companies to disclose or quickly notify threat or actual attack of data theft that occurs and potentially affects their clients, partners, customers or anyone who happen to be their data subjects. This paper reckons that in shifting some duties to the companies, the incidents of data theft can be better prevented. It argues that it is a good move for other countries like Malaysia to emulate such legal development.”

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