By Peter Davey
Leaked documents can cause everything from simple embarrassment to major financial problems for companies. If the leak is from a public company, the cost may be high if the information was ahead of earnings announcements or could be the cause of insider trading.
This past week comments from an internal memo from Kodak co-President Philip Faraci was published in a newspaper about the company’s success at the Drupa print media fair in Germany. In the memo, Faraci is quoted saying:
“Visitors are not just coming to see what we have to offer, they are coming to buy. By day two, we were at 30 percent of our Drupa sales goal — and by day four, we had reached more than 60 percent.”
The official response from Kodak is the company does not release trade show financial performance. The problem is that Kodak is a public company and must meet strict rules for financial disclosure. This may or may not turn out to be problematic for them, but it’s likely not what they wanted.
Last May HP had a similar problem that proved very costly. Prior to announcing its quarterly earnings, three memos leaked from CEO Leo Apotheker that painted a very bleak picture for the company. They warned of upcoming cost-cutting measures for the company that pointed to a rough few quarters ahead. Apotheker told executives to “watch every penny and minimize all hiring” and said the firm’s current workforce plans were “unaffordable given the pressures on our business.”
The memos were leaked to news organizations and as a result of the information, HP’s stock price dropped 5% – that was $4 billion. Very costly indeed.
Organizations need to lock down confidential documents and ensure that only authorized people can access them. Applying a persistent security policy controls who can access the documents and what they can do with them. Once the companies realized the memos were out, they could have revoked the document’s rights. This would have killed everyone’s access and made sure nothing got into the press.
One leaked document can ruin your whole day. Just ask Kodak and HP.