In a data-rich world, businesses everywhere rely on extensive information from employees, customers, and partners. But for African business leaders, especially board members, the responsibility of protecting this data goes beyond standard security measures. Privacy is not simply about securing information – it’s about respecting individual control over personal data and using it in ways that foster trust and unlock business potential.
Understanding Privacy Imperative
Security focuses on protecting systems from unauthorised access or cyber threats. Privacy, however, is about the ethical, transparent, and limited use of individuals’ personal data. Privacy addresses questions of consent, purpose, and individual autonomy over one’s data. For a board, this means ensuring that privacy is embedded in how the company collects, uses, and manages data in a way that promotes digital dignity.
As digital transformation accelerates, African organisations have an opportunity to make privacy a pillar of growth and a lever for trust. Privacy protects against reputational risks, and it can also fuel competitive differentiation. If privacy is woven into a company’s values and operations, it becomes a strategic asset that fosters trust, loyalty, and even partnership opportunities.
Privacy as a Driver of Business Growth
Privacy-driven policies build trust, a critical asset in customer relationships and brand reputation. Strong privacy practices establish that an organisation values individuals’ rights and data security, encouraging deeper engagement with clients and partners. As Africa’s data protection regulatory landscape develops, leaders who prioritise privacy beyond regulatory compliance can make this a catalyst for growth.
Consider the impact of privacy on your organisation’s overall strategy. How is the board ensuring that privacy is a pillar of trust rather than a checkbox for compliance?
The Rewards of Privacy Commitment
A board-level commitment to privacy contributes directly to a company’s success:
1. Protection and Trust: With rising data breaches and identity theft, the board’s role in protecting individual data rights is crucial. Effective data protection reassures customers that their information is secure, fostering trust and confidence in the organisation.
2. Competitive Differentiation and Loyalty: Companies that adopt clear, ethical data practices gain stronger customer loyalty and a competitive edge. According to PwC’s 2024 Trust Survey, an overwhelming 93% of business executives agree that building and maintaining trust improves the bottom line. When customers believe their data is treated respectfully, they are more likely to choose and remain loyal to that business over others.
3. Regulatory and Reputational Advantage: Over the past 10 years, we have seen 35 countries enact modern data protection laws in Africa. Proactive privacy measures can set your business apart. Compliance with local regulations, such as Nigeria’s NDPR or South Africa’s POPIA, is essential and meeting these regulations demonstrates forward-thinking governance. However, for a board, compliance should be the floor, not the ceiling. Boards that go beyond compliance build a reputation for ethical data practices, enhancing both brand reputation and investor appeal.
Guidance for Board-Led Privacy Initiatives
1. Embrace Privacy by Design: For privacy to be effective, it must be built into the very foundation of an organisation’s operations. Boards should ensure that data privacy is not an afterthought but a priority at every stage—from product development to marketing.
Are we embedding privacy into each layer of our business, ensuring that customer data is safeguarded from the ground up?
2. Oversee the Use of Privacy Enhancing Technologies (PETs) to Enable Strategic Partnerships: PETs also known as Trust Technologies or Partnership Enhancing Technologies can open doors for collaborative data innovation. PETs allow businesses to analyse data collectively while preserving the privacy of individuals in each party’s dataset involved.
Boards should oversee the implementation of PETs and receive regular updates on their effectiveness.
Imagine a partnership scenario in which a financial institution and a healthcare provider wish to analyse trends in healthcare financing. Using PETs such as secure computation or homomorphic encryption, they can gain insights without sharing individual-level data, allowing for data collaboration that respects privacy while driving strategic growth. As an oversight question: Is the board ensuring that the company is leveraging such technologies to protect privacy in its strategic partnerships, while empowering innovation?
3. Champion a Privacy-First Culture from the Top: While executives drive culture, the board’s role is to set clear expectations and accountability standards. Boards can institutionalise privacy by setting KPIs for privacy, supporting a Chief Privacy Officer (or equivalent), and regularly evaluating the company’s privacy commitments.
Are we, as a board, setting a tone of accountability that ensures privacy is valued across every level of the organisation?
Embedding Privacy in Governance for Risk Mitigation
An embedded privacy practice can help mitigate financial, legal, and operational risks, directly impacting a company’s profitability. In Nigeria, organisations that violate the NDPR or experience a data breach face a fine of 2% of their Annual Gross Revenue of the preceding year or up to 10 million Naira, whichever is greater. In 2023, a bank in Nigeria was fined over N500 million by the Nigerian Data Protection Commission for a data breach. Such fines can erode profit and shareholder value, impacting returns on investment—something boards must take seriously.
Boards can also strengthen governance by instituting regular privacy briefings at board meetings and supporting the appointment of a Chief Privacy Officer to oversee privacy and report directly to the board. Ensuring periodic privacy audits and setting measurable privacy KPIs can provide transparency, helping board members monitor the effectiveness of privacy initiatives and reinforcing their accountability for overseeing privacy risk management.
Leveraging Africa’s Digital Advantage
While the world grapples with outdated frameworks, Africa has a unique opportunity to build a cutting-edge digital ecosystem that places privacy at the forefront. By prioritising privacy as a strategic imperative, African businesses can position themselves as leaders in ethical data use, standing out not only locally but on the global stage.
For boards, the question is clear: How soon can we make privacy a cornerstone of our business strategy?
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
