No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe
Jump to a Section
  • At the Office
    • Ethics
    • HR Compliance
    • Leadership & Career
    • Well-Being at Work
  • Compliance & Risk
    • Compliance
    • FCPA
    • Fraud
    • Risk
  • Finserv & Audit
    • Financial Services
    • Internal Audit
  • Governance
    • ESG
    • Getting Governance Right
  • Infosec
    • Cybersecurity
    • Data Privacy
  • Opinion
    • Adam Balfour
    • Jim DeLoach
    • Mary Shirley
    • Yan Tougas
No Result
View All Result
Corporate Compliance Insights

M&A in the Age of Data

by Christian Auty
January 5, 2017
in Uncategorized
Preventing cybersecurity issues around M&As

You know a practice area has made it when it is on a standard due diligence checklist.  Cybersecurity has made it.  Ten years ago, it was a rare attorney who focused on data privacy and protection. Now it is common and standard to review network logs or at least the most recent security audit of a target company, to ask searching questions of the CIO, to review prior breach investigation documentation and generally to understand the data architecture of the target.

The primary fear remains the dreaded unrecognized breach.  Indeed, the Yahoo-Verizon deal may be dead because of such a breach, and if not, current reports indicate that Verizon is asking for as much as a $1 billion discount.  Ideally, the diligence process would ferret out a large breach, but as the Verizon-Yahoo incident makes clear, this is not always the case.  It is no secret that detecting a breach can be challenging – sometimes more so than preventing one – and there is no silver bullet.  But beyond breach detection, cybersecurity is changing deals and altering target parameters in a number of ways.

Certifications Have More Value

There are a lot of certifications out there.  Some, however, shorten the diligence process considerably.  These certifications/reports typically involve periodic audits by third parties and rigorous risk assessment and management protocols.  In particular, ISO27001 certification and SOC1 and SOC2 reports are good examples of third-party confirmation that a target company’s security is in keeping with current best practices.  While these reports and certifications offer no guarantees against a breach, they are confirmation that the entity has considered data privacy issues and conducted a reasonably sophisticated risk assessment.  This, in turn, makes the target more attractive to potential buyers and shortens the diligence process.

Integration Remains a Challenge

System integration remains a blind spot for companies during the negotiation phase.  The merging of two IT systems is almost invariably messy.  The number of administrators and privileged accounts doubles as a general rule and it is not always clear which systems will be preferred in the long run.  There may be conflict among IT professionals from the two companies and strong opinions regarding the merits of particular systems and software.  At the same time, leadership is understandably focused on the deal, on the value to shareholders and on “getting over the finish line.”  Sophisticated cybercriminals thrive in this sort of environment, and weaknesses can go undetected for a very long time.

European Partners Will Be Especially Focused on Cybersecurity

The General Data Protection Regulation (GDPR) is set to go into effect in May of 2018.  This regulation is poised to fundamentally alter the risk calculus for European data controllers and data processors.  The reason is the fines authorized under the GDPR; they are enormous.  Fines for certain violations can reach €20 million or more.  Therefore, European executives in particular will be focused on full compliance and likewise will wish to avoid having to report a data breach to GDPR supervisory authorities.  The dramatic increase in potential penalties in Europe will inevitably lead to increased pre-merger scrutiny of the processes and controls in place at target companies.  Already, European data controllers that will be governed by the GDPR are insisting on heightened security standards from contractual counterparties.  This trend will only continue, and it is highly likely that there will be increased scrutiny on not only merger targets, but on vendors and other third parties providing services to merger targets to ensure compliance.  In short, the emphasis on cybersecurity in cross-border deals with EU counterparties is poised to increase markedly in the coming years.

Put simply, mergers usually make organizations more vulnerable in the short term.  After a merger, significant data security challenges remain.  These should be addressed at the outset, and a clear plan should be negotiated by counsel with input from IT stakeholders at both companies so that integration happens as smoothly and quickly as possible.


Tags: Communications Management
Previous Post

3 Reality Checks for Compliance and Risk Management in 2017

Next Post

Hiding Behind the Privilege

Christian Auty

Christian Auty

Christian Auty is a Principal at law firm Much Shelist. An experienced litigator, Christian has an established reputation as a strong client advocate and is well-versed in issues on the intersection of law and technology, including data privacy and data breach response, electronic discovery, data storage and retention practices and information governance. .

Related Posts

cubist style art of robot holding a pencil

Want to Be Part of the Generative AI Revolution? Start With Treating It Like an Assistant.

by Dave Cumberland
October 31, 2023

Integrating AI into internal communications can streamline how teams talk to each other

stack of newspapers on laptop

The Social Construction of a Scandal

by Michael Toebe
December 9, 2019

Do corporate execs and legal counsel truly understand the role news media plays in establishing the narrative about fault and...

woman holding smartphone with many "like" and "heart" reactions

Engaging Social Media is More Effective Risk Management

by Michael Toebe
October 25, 2019

Social media communication is a rarely implemented risk management tool, but it should get more play. Michael Toebe makes the...

black and white illustration of shark jumping out of water

The Shark in the Wave: Revealing the Lurking Danger of Slack Data

by James Murphy
June 17, 2019

Hanzo’s Jim Murphy explores the danger of Slack data; voluminous, informal, unstructured and context-dependent, it’s a threat hiding in plain...

Next Post
attorney-client privilege vs. compliance

Hiding Behind the Privilege

No Result
View All Result

Privacy Policy | AI Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Research
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2025 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
No Result
View All Result
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe

© 2025 Corporate Compliance Insights