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Privacy officers get a seat in executive boardrooms

As some companies have been sharply criticized or even sued for how they have handled customer information, many businesses have responded by hiring officers to establish privacy policies.

When IBM last week hired a privacy officer, it became the latest technology company to add one of the hottest new job titles in the business.

As some companies have been sharply criticized or even sued for how they have handled customer information, many businesses have responded in part by hiring officers to establish and maintain privacy policies.

High-profile companies such as DoubleClick and RealNetworks have caused an uproar over how they have handled private information. And lawsuits have been filed against failed Web businesses and Toysmart, charging that they sold or tried to sell customers' private information.

Hiring a privacy officer reminds companies about "privacy issues they need to look out for when developing products and services," said Richard Smith, chief technology officer with the Privacy Foundation.

Even the federal government is on board. Congress is considering proposals for a government-wide chief information officer to manage information and technology policies.

Last week, IBM named Harriet P. Pearson chief privacy officer to articulate the software privacy policy for the Armonk, N.Y.-based software company and its customers. Pearson is also expected to develop policy and work with software and technology groups to ensure all parties adhere to IBM's privacy standards.

In September, online marketing company 24/7 Media added a chief privacy officer to its executive lineup.

Important for big and small
Analysts and privacy executives say the most important change a privacy officer can make is to give a single, focused explanation of the company's privacy policy.

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IBM puts focus on privacy with new executive post
Harriet Pearson, Chief Privacy Officer, IBM
"Once a company has a privacy officer, or team, on board they look at the issue much more closely," Smith said. "This is especially true for small to medium-sized companies, where the 50 or 100 employees are worrying more about keeping the company running than their privacy policy."

The same can be said of the larger software companies as well, even the largest: Microsoft.

The software giant named Richard Purcell privacy officer in January. Today, he says a big part of the job is "trying to make sure we define what privacy is to our business partners, our consumers and within our own company."

Purcell said he also clarifies what level of control customers and consumers have over what information they want to share and not share. Along with policy definition and education, the eight-year Microsoft veteran said he also has a hand in developing technology that helps protect customer information.

For example, an upcoming version of Internet Explorer will have software that lets people know if privacy policies on Web sites they visit meet their own privacy requirements.

Purcell said such tools allow customers to have more control over the information they want to share while on the Web.

"We don't want to tell them what to do. We want to let them control their own information," he said.

Getting the word out
Letting consumers know what information they're sharing and how it will be used is the core of any privacy policy. It has also been the root of many a controversy surrounding information privacy issues.

RealNetworks has been at the center of a couple of lawsuits regarding consumer privacy and has established a privacy team whose members represent every product development group in the company.

Heading up RealNetworks' privacy team is Alex Alben, who is responsible for setting and implementing policy and working with the legal and communications departments of the company. He is also the liaison for privacy issues between the company's business partners.

In the last year, privacy has taken center stage not only because of high-profile cases of companies trying to sell customer information, but also through more subtle examples.

Earlier this year, lawsuits broke out over the discovery of "Web bugs"--widely used, yet virtually undetectable means of tracking people's Internet surfing habits. In addition, accidental data spills have sparked outrage among customers whose personal information--sometimes even credit card information--has been inadvertently exposed.

All of that, analysts say, makes it a good move for companies to hire privacy officers and make privacy a top priority.

"Let's face it," said Bill Malik, a Gartner analyst. "The Internet could collapse like citizens band radio did if consumers don't feel their information is protected online."