Impending changes to the laws on data protection are intended to improve security and encourage vigilance, but financial directors could be at risk if something goes wrong. Professional indemnity partner, Alex Traill explores the issue further in the latest edition of Financial Director.
“The regulation aims to improve data security and encourage business leaders to be more vigilant when dealing with sensitive data. It will give regulatory authorities, particularly the information commissioner, additional powers to impose severe penalties on businesses, including third parties, and prosecute company officials in the event of a breach in data security.
“At a company level, the regulators will have the authority to impose a fine of up to 5% of the firm's global turnover following a breach, whereas personal liability for a breach could incur a maximum fine of €1m (£700,000), and in the case of financial directors of UK-based companies, a potential custodial sentence.”
You can read the article in full on the Financial Director website.