In today’s data-driven world, the role of the board in safeguarding data privacy has never been more critical. As organisations collect and process increasing volumes of sensitive information, they face mounting risks associated with breaches, non-compliance and reputational damage – placing the board at the forefront of data privacy governance.

But what exactly does this responsibility entail? And how can boards ensure they’re meeting their obligations effectively? Let’s explore the key responsibilities and best practices for boards to navigate the complexities of data privacy.

Why data privacy is a boardroom priority

Data privacy is no longer just an operational or IT issue, it’s a strategic one. With global regulations playing catch up, compliance is essential to avoid fines while maintaining and building trust with stakeholders.

High-profile data breaches have demonstrated the tangible costs of privacy failures – from legal fees and regulatory penalties to eroded customer trust.

It’s no secret that data breaches are costly for businesses. IBM reported that the average total cost of a data breach in 2024 was USD $4.88 million – a 10% increase on the previous year.

Take National Public Data (NPD) for example. A breach of the background checking firm in December 2023 exposed the data of hundreds of millions of people through the disclosure of an estimated 2.9 billion records. This included highly sensitive personal data including full names, social security numbers, mailing addresses, email addresses and phone numbers. The hacker then released the database of stolen information on the dark web – resulting in a severe impact for those affected. Following on from this in October 2024, NPD filed for bankruptcy. 

This serves as a reminder about the financial and reputational damage that can occur with data breaches. Boards that prioritise data privacy set the tone for the entire organisation, underscoring its importance as a key component of long-term resilience and success.

Key responsibilities of the board 

1. Setting the tone from the top

The board is responsible for embedding a culture of data privacy across the organisation. By prioritising privacy in strategic decisions, they signal its importance to executives and employees alike.

2. Understanding privacy risks 

Directors must ensure they have a clear grasp of the data the organisation collects, processes and stores. They need to understand associated risks such as unauthorised access, data breaches or improper use of information.

3. Compliance oversight

Boards are accountable for ensuring the organisation adheres to relevant data privacy laws and industry standards. Regular updates from compliance teams or external audits can help the board stay informed about the company’s adherence. 

4. Resource allocation

Boards must advocate for adequate resources – whether in technology, personnel, or training to effectively manage data privacy. Including ensuring the organisation invests in secure infrastructure and up-to-date policies.

5. Crisis management preparation

The board plays a pivotal role in overseeing the organisation’s incident response plan. Directors should ensure the company is prepared to act swiftly in the event of a breach to minimise damage and maintain stakeholder trust.

Best practices for safeguarding data privacy

To uphold responsibilities, boards can implement the following best practices: 

• Stay educated: invest in ongoing training for board members to understand evolving data privacy laws, cyber threats and risk management strategies.
• Appoint a data privacy champion: Designate a board member to lead data privacy oversight and serve as a liaison with the business’s Chief Information Security Officer or Data Protection Officer
• Demand regular reporting: Ensure that the board receives regular updates on the organisation’s data privacy performance, including audits, risk assessments and incident reports.
• Adopt a proactive approach: Advocate for privacy-by-design principles, ensuring that privacy is embedded in the development of new products, services and systems.
• Foster transparency: Encourage the organisation to communicate openly about its privacy practices with stakeholders including employees, customers and regulators.

The bottom line

Data privacy is an ongoing challenge that requires constant vigilance and adaptation. Boards that embrace their responsibilities in this area can steer their organisations to stay ahead of risks, maintain compliance and build lasting trust with stakeholders.

By championing best practices and prioritising a culture of privacy, directors play a crucial role in shaping an organisation’s resilience in an increasingly complex digital landscape.

At Stellar, we understand the high stakes of handling sensitive board and council data. From protecting confidential board discussions to securely accessing documents offline, our platform is designed to keep your data safe. 

Ready to empower your board with the tools they need to safeguard data privacy? Stellar has advanced security features including end-to-end encryption, two-factor authentication, access controls & manage permissions and real-time activity monitoring. Learn more about Stellar’s secure business platform and how it can support your data privacy efforts.