Analysis: Strong Data Privacy and Security Management Pays Off

Cyberthreats are broadening and deepening, and they can materially affect a company’s performance through fines, class action lawsuits, loss of consumer trust, and operational disruption. 

^{*Currency in use: Base Currency     Source: Morningstar Sustainalytics}

We used the Data Privacy and Security Policy (DP&S) management score as a variable to assess returns one year later, mainly due to its good historical track record depth: A fitting assessment score to measure cybersecurity strength prior to an incident.

Notes:

_{¹ Management Indicator Scores include predicted, retroactively researched, and actual historical scores before the incident date.}

• _{Data Privacy and Security Management Indicator Scores prior to incident; Score 75 to 100 (12), Score of 25 to 50 (18), Score of 0 or N/A (38).}
• _{N/A is representative of companies where no predicted or historical research for the Management Indicator Score was available}
• _{Currency in use: Base Currency. A financial return that does not take into consideration reinvestment of dividends. Dividends are treated as a cash payout as of the end of the period. The calculation is point to point using adjusted price at the beginning of the period and the adjusted price at the end of the period incorporating any dividends paid.}

_{² Management Indicator Scores include predicted, retroactively researched, and actual historical scores before the incident date.}

• _{Data Privacy and Security Indicator Management Scores prior to incident; Score 75 to 100 (12), Score of 25 to 50 (18), Score of 0 or N/A (38).}
• _{N/A is representative of companies where no predicted or historical research for the management score was available}
• _{Currency in use: Base Currency. A financial return that does not take into consideration reinvestment of dividends. Dividends are treated as a cash payout as of the end of the period. The calculation is point to point using adjusted price at the beginning of the period and the adjusted price at the end of the period incorporating any dividends paid.}  
• _{Standard Deviation return calculations are made monthly. A statistical measurement of dispersion about an average and depicts how widely the returns varied over a certain period of time. Morningstar computes standard deviation using the trailing monthly total returns for the appropriate time period. All of the monthly standard deviations are then annualized.}