The impact of data protection regulatory reforms strengthens the
argument for tech-savvy NEDs in the boardroom, says Ogier partner
Sara, who has spoken at industry seminars on NED roles and the
EU GDPR reforms in the last fortnight, says that there is a need
for increased awareness and understanding on boards of tech-related
issues and processes.
"The data protection reforms, cyber security issues and the
general trend towards increased automation of administrative tasks
are three of the main strategic issues across all sectors
today," said Sara.
"Each of those issues requires engagement at boardroom
level, and that means that directors need to ask themselves real
questions about whether they have the necessary knowledge and
experience to address those issues – if not, they should
seriously consider recruiting a NED with some technical
This week's seminar on the GDPR which comes into force in
just over a year demonstrated that businesses still have
significant questions about how it will impact them. The reforms,
which affect any firm that wants to trade into the EU, set new
restrictions on the control of data, new responsibilities to keep
it safe from hackers, create the much-discussed "right to be
forgotten" and new obligations to disclose data breaches.
The most serious penalties for non-compliance are for fines of
up to 20 million euros, or 4% of global turnover.
Sara said: "Our financial and digital sectors both rely on
seamless and rapid flows of information across jurisdictional
"And while a lot of the shock and horror has reasonably
focused on the fines of up to 4% of global turnover, firms should
also be mindful of the new requirements to disclose data breaches
to regulators and to those individuals whose data has been
affected, and the knock-on reputational damage that could flow from
"These are strategic issues that merit consideration and
discussion at boardroom level – as a result, boards need to
have or recruit the necessary expertise. Given the importance of
data protection reforms, cyber security and automation, the value
of tech-savvy NEDs has never been higher."
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Now that the United Kingdom has served notice to leave the European Union under Article 50 of the Lisbon Treaty, managers of offshore funds have a clearer timetable for when Brexit will happen, with the UK scheduled to leave the EU in March 2019.
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