Companies Taking Cybersecurity Seriously
Today’s announcement by Target shows that company boards continue to take cybersecurity very seriously. The data breach that allowed hackers to steal 40 million credit and debit cards and the personal information of 70 million Target Customers has led to President and CEO Gregg Steinhafel’s resignation. He has also stepped down from the board of directors.
Target has taken a number of steps to increase their cybersecurity since the breach in November/December 2013, including the announcement that they’ll switch their branded credit and debit cards to a more secure technology.
From The Wall Street Journal:
“Target breach costs CEO his job. Target Corp. replaced Chief Executive Gregg Steinhafel, removing a 35 year lifer who won plaudits for his merchandising ability but whose tenure was marred by a massive data breach over the holidays. Mr. Steinhafel’s departure is an indication of the seriousness with which boards now take cybersecurity, and leaves a void at the top of one of the largest U.S. retailers at a time of deep change in shopping habits and a weak economic recovery, especially among low-income shoppers. There were also questions over whether internal failures at Target made it easy prey for the data thieves. He is succeeded on an interim basis by CFO John Mulligan.”
According to Boston.com, the massive data breach continues to cost the company money:
” Target reported in February that its fourth-quarter profit fell 46 percent on a revenue decline of 5.3 percent as the breach scared off customers.
Target’s sales have been recovering as more time passes, but it expects business to be muted for some time: It issued a profit outlook for the current quarter and full year that missed Wall Street estimates because it faces hefty costs related to the breach.
Target’s shares have been volatile and are down 2.5 percent since the breach was disclosed. The shares are now trading at about $62.”