Investor Views On Company Security
Almost nine in 10 (87%) investors feel if a company fails to deal with a security incident quickly and efficiently it would alter their perception of that company, according to new research from MORI. The survey, commissioned by management and IT consultancy LogicaCMG, shows seven in 10 investors (70%) feel their perception of the company would be altered if the company experienced an information security breach.
Investors consider Corporate/Brand reputation more important than Information Security as a criterion when evaluating whether to buy or sell company stock. However, both criteria are seen as important (89% and 68% respectively).
If a security breach would occur a majority of investors (61%) believe that Corporate/Brand reputation would be impacted at least a fair amount. Half (50%) think the share price would be similarly impacted while just under a half (45%) think that customer loyalty will also be affected.
An overwhelming majority (96%) say that if a company misrepresents their financial reporting it would affect their evaluation at least a fair amount. Additionally, 92% believe that the sudden departure of a senior/critical member of staff would similarly impact their evaluation of that company. Just over half (51%) think that an information security breach would impact their evaluation.
Over half (54%) are neutral on whether that UK plcs are doing enough to address information security issues, possibly showing investors may not be fully aware of the issue. However, 87% agree that the company's board should be aware of and review its information security measures and vulnerabilities.
Hacking into a company's product source codes or formulas is considered to have the greatest negative impact on valuation and the greatest event to contribute to a decision to sell that company's shares (69% and 56% respectively).
Technical details
Methodological note: MORI interviewed 100 UK Equity Fund Managers, across Britain, between 6th June and 26th July 2004. Interviews were carried out face-to-face.
