Tarek Jundi, Managing Director, Middle East & Turkey, McAfee
With just a couple of months to go, reports and surveys frequently indicate that CIOs and business owners are concerned about and unprepared for GDPR. And the race is on, with a Veritas study indicating that more than half of organisations are yet to start work on meeting the minimum requirements set by GDPR. Many organisations are looking to bring their cyber procedures and capabilities up to scratch ahead of its becoming enforceable, May 2018. But, with an evolving IT threat landscape, new technologies introducing new risk, and a cyber-skills deficit, it’s important that CIOs and IT directors not only focus on this critical deadline but also look beyond it.
From large enterprises to SMEs, many organisations are shifting their traditional business model away from physical assets in favour of a data-driven business model. Cloud, mobility and the advent of Internet of Things are driving this digital transformation, introducing new challenges that organisations must navigate to ensure citizens’ and employees’ data is protected.
While the combination of new technologies and the new regulation may seem an insurmountable task to manage over the next 12 months, CIOs and IT directors should look at GDPR as an opportunity. Rather than approaching it separately and in isolation, the new regulation has put a price on cybersecurity and secure data management—bringing it to the attention of the C-Suite. CIOs and CISOs should harness this opportunity to get the budget and procedures in place that will enable them to transform their organisations’ approaches to cybersecurity and reposition IT as a function that enables business transformation and growth.
This will have a dramatic impact on a number of current security challenges many IT teams are facing, such as the massive growth in Shadow IT. According to a recent McAfee Labs Report, almost 40% of cloud services are now commissioned without the involvement of IT, and unfortunately, visibility of these Shadow IT services has dropped year on year. 65% of IT professionals think this phenomenon is interfering with their ability to keep the cloud safe and secure. This is not surprising given the amount of sensitive data now being stored in the public cloud and more than half (52%) of respondents report that they have definitively tracked malware from a cloud SaaS application.
For the first time, GDPR gives CIOs and IT leaders the authority to clamp down on shadow IT in their company, with the support of the rest of the board who fear the ramifications of GDPR.
Better Late Than Never – Getting Started on the GDPR Journey
There are specific requirements in the Regulation—reporting breaches, reviewing processing in advance, making sure vendor contracts have particular language. But GDPR makes a larger and more fundamental ask: That each company look carefully and studiously at its environment, evaluate the data it holds, and “implement … measures to ensure a level of security appropriate to the risk.” It’s a sort of data protection soul-searching designed to protect people and their data from harm. And this perspective challenges organizations to embrace the spirit of the law and be accountable for it, not just to tick a box.
“Appropriate” and “adequate”—tough words in a security context—are found repeatedly in the GDPR. The regulation suggests that “(i)n assessing the appropriate level of security, account shall be taken in particular of the risks that are presented by processing, in particular from accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data transmitted, stored or otherwise processed.” That sounds like a basic risk assessment. But what should you consider in this high-stakes risk assessment, and how do you get to where you can say you have appropriate security?
Remember: This isn’t legal advice—each company has to decide for itself what it needs to do to comply with GDPR but I would suggest you consider these steps as ways to get started on the journey:
- Scope. Know what you have. We can’t protect what we don’t know we have. This is a good time for companies to figure out how and where they hold personal data—and not just of EU residents, and not just for its EU affiliates.
- Protect. Know how you are protecting those assets. Are you doing the basics? Could you do more? Are your peers doing more? Are you following your data classification policy in automated ways or just expecting employees to know it? Do you delete unnecessary data?
- Monitor and detect. Do you have technologies in place (such as encryption, data-loss prevention or anti-virus software) to protect those assets from malicious actors, loss, unwanted leaks? And do you know what to do if something goes wrong?
- Review. Do you have a process to make sure that all new applications or cloud services are reviewed and that you know how you are using them? Are you implementing data protection by design by thinking of privacy and security at the very beginning of any project?
- Then repeat. The regulation requires “a process for regularly testing, assessing and evaluating the effectiveness of technical and organisational measures for ensuring the security of the processing.”
Some of the specifics of what the regulation requires will take years to truly understand as regulators and courts issue rulings on what comes in front of them, and companies will have different paths to compliance with GDPR. But at the core of the regulation is knowing what you do with the personal data of your employees and customers, and making sure you have stopped to consider the risks inherent to personal data in your business.
Thinking of GDPR as an opportunity to review the robustness of your data protection program and to make reforms that are good security, good business, and the right thing to do turns GDPR from a many-headed monster into healthy data-centric reform. After all, the GDPR tells us that “the processing of personal data should be designed to serve mankind.”
IMF lifts global growth forecast for 2021, still sees ‘exceptional uncertainty’
By Andrea Shalal
WASHINGTON (Reuters) – The International Monetary Fund on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be nearly a full percentage point less severe than expected.
It said multiple vaccine approvals and the launch of vaccinations in some countries in December had boosted hopes of an eventual end to the pandemic that has now infected nearly 100 million people and claimed the lives of over 2.1 million globally.
But it warned that the world economy continued to face “exceptional uncertainty” and new waves of COVID-19 infections and variants posed risks, and global activity would remain well below pre-COVID projections made one year ago.
Close to 90 million people are likely to fall below the extreme poverty threshold during 2020-2021, with the pandemic wiping out progress made in reducing poverty over the past two decades. Large numbers of people remained unemployed and underemployed in many countries, including the United States.
In its latest World Economic Outlook, the IMF forecast a 2020 global contraction of 3.5%, an improvement of 0.9 percentage points from the 4.4% slump predicted in October, reflecting stronger-than-expected momentum in the second half of 2020.
It predicted global growth of 5.5% in 2021, an increase of 0.3 percentage points from the October forecast, citing expectations of a vaccine-powered uptick later in the year and added policy support in the United States, Japan and a few other large economies.
It said the U.S. economy – the largest in the world – was expected to grow by 5.1% in 2021, an upward revision of 2 percentage points attributed to carryover from strong momentum in the second half of 2020 and the benefit accruing from $900 billion in additional fiscal support approved in December.
The forecast would likely rise further if the U.S. Congress passes a $1.9 trillion relief package proposed by newly inaugurated President Joe Biden, economists say.
China’s economy is expected to expand by 8.1% in 2021 and 5.6% in 2022, compared with its October forecasts of 8.2% and 5.8%, respectively, while India’s economy is seen growing 11.5% in 2021, up 2.7 percentage points from the October forecast after a stronger-than-expected recovering in 2020.
The Fund said countries should continue to support their economies until activity normalized to limit persistent damage from the deep recession of the past year.
Low-income countries would need continued support through grants, low-interest loans and debt relief, and some countries may require debt restructuring, the IMF said.
(Reporting by Andrea Shalal; Editing by Shri Navaratnam)
Leon Black step downs as Apollo CEO after review of Epstein ties
By Mike Spector and Chibuike Oguh
NEW YORK (Reuters) – Leon Black said on Monday he would step down as chief executive at Apollo Global Management Inc, following an independent review of his ties to the late financier and convicted sex offender Jeffrey Epstein.
While Black, whose net worth is pegged by Forbes at $8.2 billion, will remain Apollo’s chairman, his decision to step down illustrates how doing business with Epstein weighed on the reputation of one of Wall Street’s most prominent investment firms. Black co-founded Apollo 31 years ago.
Apollo said it plans to change its corporate governance structure, doing away with shares with special voting rights that currently give Black and other co-founders effective control of the firm.
The independent review, conducted by law firm Dechert LLP, found Black was not involved in any way with Epstein’s criminal activities. Black paid Epstein $158 million for advice on tax and estate planning and related services between 2012 and 2017, according to the review.
Black, 69, said that although the review confirmed he did not engage in any wrongdoing, he “deeply” regretted his involvement with Epstein.
“I hope that the results of the review, and related enhancements … will reaffirm to you that Apollo is dedicated to the highest levels of transparency and governance,” Black wrote in a note to Apollo fund investors. He will step down as CEO no later than July 31.
Apollo co-founder Marc Rowan, 58, will take over as CEO.
Rowan has often kept a low-key profile compared with Apollo’s other co-founder, Joshua Harris, 56, and spearheaded many initiatives that turned Apollo into a credit investment giant, including the permanent capital base the firm enjoys through its ties to reinsurer Athene Holding Ltd.
The revelations of Black’s ties to Epstein took a toll on Apollo, which Black turned into one of the world’s largest private equity groups. Apollo executives had warned in October that some investors had paused their commitments to the buyout firm’s funds as they awaited the review’s findings.
Apollo shares are down 1% since the New York Times reported on Oct. 12 that Black paid at least $50 million to Epstein for advice and services, when most of his clients had deserted him.
Over the same period, shares of peers Blackstone Group Inc, KKR & Co Inc and Carlyle Group Inc are up 19%, 10% and 23%, respectively.
“We think a large number of (Apollo fund investors) took a ‘pause’, and we believe the outcome (of the review) and changes today will cause most of them to return to allocating to future Apollo funds,” Credit Suisse analysts wrote in a research note.
Apollo shares jumped 4% to $47.65 in after-hours trading on Monday.
“We continue to follow these events closely and will evaluate how Apollo addresses its issues,” the California State Teachers’ Retirement System, one of the largest U.S. public pension funds and an Apollo investor, said in a statement.
Epstein was found dead at age 66 in August 2019 in a Manhattan jail, while awaiting trial on sex trafficking charges for allegedly abusing dozens of underage girls in Manhattan and Florida from 2002 to 2005. New York City’s chief medical examiner ruled that the cause of death was suicide by hanging.
Black previously said he had paid millions of dollars to Epstein, but the exact size of his payments was revealed for the first time on Monday. Beyond the $158 million in payments, Black made two loans to Epstein totaling $30.5 million in early 2017.
Dechert said in its report that Black’s social ties with Epstein, who built his fortune by endearing himself to powerful figures in high society, went back to the mid-1990s.
Epstein won Black’s trust by resolving an estate tax issue for him in 2012 potentially worth at least $500 million, the report said. He ended up advising Black on various aspects of his personal financial affairs, from his family office and airplane to his yacht and artwork.
Black believed that Epstein provided advice over the years that conferred between $1 billion and $2 billion in value to him, according to the Dechert report. Black said in his note to investors that he had paid Epstein a fee equivalent to 5% of the value he generated on an after-tax basis, and not tied to hourly rates.
Black and Epstein’s relationship deteriorated after Epstein failed to repay $20 million of the loans and Black refused to pay tens of millions of dollars in fees that Epstein demanded, according to the Dechert report.
They severed ties in October 2018, according to the report. Black knew Epstein had been convicted in Florida a decade earlier for soliciting prostitution from a minor, the Dechert report said, but there was no evidence suggesting Black had knowledge of the other alleged crimes before they were publicly reported in late 2018, culminating in Epstein’s July 2019 arrest.
On Monday, Black pledged $200 million toward “initiatives that seek to achieve gender equality and protect and empower women,” as well as helping survivors of domestic violence, sexual assault and human trafficking.
Apollo said it would pursue a “one share, one vote” corporate governance structure that would do away with shares with special voting rights. It said the move could qualify it for listing on the S&P Global indices.
Apollo also said it would seek to give its board more authority to oversee its business, eroding the power of its executive committee led by Black.
The board will be expanded to include four new independent directors, including Avid Partners founder Pamela Joyner and physician and scientist Siddhartha Mukherjee, Apollo said. Apollo co-Presidents Scott Kleinman and James Zelter will join the board and take on increased responsibility running day-to-day operations.
Apollo had about $433 billion in assets under management as of the end of September.
(Reporting by Mike Spector and Chibuike Oguh; Additional reporting by Lawrence Delevigne and Jessica DiNapoli in New York; Editing by Sonya Hepinstall, Leslie Adler and Kim Coghill)
EU sees no cliff-edge ending for COVID fiscal stimulus
BRUSSELS (Reuters) – European governments will not need to abruptly end fiscal support for their economies after the pandemic, top officials said on Monday, noting that any withdrawal of stimulus would be carried out gradually and only once the economy has recovered.
Euro zone public debt rose sharply during 2020 and is likely to exceed 100% of GDP this year as governments borrow to help individuals and businesses survive lockdowns.
The higher debt raises concern about how to deal with it down the road and when to start cutting it again, since the EU last year suspended its rules limiting budget deficits and debt, known as the Stability and Growth Pact (SGP).
EU finance ministers are to discuss when to reintroduce any borrowing limits in the second quarter of this year.
“I believe it important that finance ministers debate and reach a common understanding on the appropriate fiscal stance by the summer. This can then serve as guidance for the preparation of their draft budgetary plans for 2022,” the chairman of the euro zone’s group of finance ministers, Paschal Donohoe, said on Monday.
“To avoid any misunderstanding, let me stress that this is not about an imminent withdrawal of fiscal stimulus,” he told the economic committee of the European Parliament.
“We all agree that our immediate priority is to shield our citizens, in particular younger cohorts and those most exposed to the crisis. There must be no cliff-edges,” he said.
Joao Leao, the finance minister of Portugal which holds the rotating presidency of the EU and therefore sets the agenda for EU finance ministers’ work until June, was equally cautious.
“We should not withdraw stimulus too early. We need to make sure the suspension clause for the SGP remains in force at least until we return to pre-crisis economic figures,” he told the committee. “We need to make sure jobs are maintained as well as the production capacity of companies.”
He said first cash from the EU’s 750 billion euro post-COVID economic recovery programme should reach the economy in the first half of the year.
“Real funding should be getting to the economy before the summer or in early part of the summer,” he said.
(Reporting by Jan Strupczewski; Editing by Giles Elgood)
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