Corporate Secrecy & Privacy & Roles of Whistleblowers, Informers, Leakers, Hackers…: The Booming Market for Secrets & Deceptions…

“Secrecy is critical to more businesses than most people might imagine. Entire industries are based to some extent on the process of creating goods and services and then putting them behind walls of secrecy.”

‘Secrecy & privacy’ is an important part of corporate culture in every industry: Is there a difference between ‘privacy’ and ‘secrecy’? According to Jeremy Fisher, ‘secrets’ can be shared, whereas ‘privacy’ is a solitary experience. Unlike privacy, secrets are used to gain power and the element of surprise. Unlike secrecy, privacy is a way of shutting out external influence. The main problem when trying to define the differences between privacy and secrecy is that they can mean different things to different people.

According to Chad Perrin, the key to maintaining secrecy is to reorient one’s perspective on security. Protect the ‘right’ things and you can maintain reasonable security. Protect the ‘wrong’ things and you are doomed before you begin. The shelf life of a secret, especially in large organizations, is increasingly minuscule, and effectively limited only by the quickness with which modern technology can be leveraged to distribute such secrets beyond the set of people authorized to access those secrets. Companies become successful, in part, by staying one step ahead of the competition.

They accomplish this by keeping sensitive information, i.e., trade secrets confidential. What is a trade secret? Many states have adopted a statute known as the ‘Uniform Trade Secrets Act’, which forms as the model for trade secrets. Simply, trade secret is any private information about a business that gives an economic advantage over the competition. Typically trade secrets include; customer lists, formulas, patterns, software, devices, methods, techniques, process, financial records, contracts, and the like; information that would be very valuable to the competition. The law protects this information, as long as reasonable steps have been taken by the company to protect it.

In the articleIs Secrecy Necessary in Business by Philip R. Diab writes:  Every organization has sensitive information that it guards carefully and protects against having competitors or non-authorized individuals from gaining access to.  This type of information can be technical documentation on the inner-workings of products, strategic plans, market research, or a variety of other types of documents.  In fact, conventional wisdom has held in the past that the organization should not reveal documents such as strategic plans to anyone but a select few so as not to jeopardize the success of these plans.

However, there are leaders in the field who advocate the exact opposite in terms of sharing such information and being a bit more transparent with employees, suppliers, customers, and even competitors.  It’s likely that there will not be agreement as to what should be shared versus what should be ‘hidden’ from others, what can be agreed is the fact that some information should be considered confidential.  Confidentiality is a part of the business culture and in every industry.  This makes good business sense; however, what should be of concern is the confusion between confidentiality and secrecy.

I’ve observed that in some organizations there are individuals who behave in an almost paranoid manner.  So rather than focus on protecting confidentiality, they go above and beyond to scaring everyone from sharing any information with anyone because they fear negative consequences. While it may seem that secrecy and confidentiality are the same concept, in my perspective they are greatly different.  Secrecy is focused on withholding information from individuals and groups.

Confidentiality on the other hand is focused on ensuring that any information that is shared with an individual or group is not given to someone who does not have authorization to see it. What is necessary is to set clear governance policy that balances the need for transparency as well as confidentiality, while avoiding secrecy…

In the article A World of Secrets: Why We Should Cherish Leakers and Hackers by Bob Simpson writes:  In a world of secrets and lies there are groups like WikiLeaks, anonymous and information leakers that supply the truth…Yes, they do break the law. It is often necessary to break the law to achieve justice. Corporations both large and small keep secrets. It’s a bizarro world of trade secrets, non-disclosure agreements, patent abuse, competitive advantage, insider trading, tax evasion, environmental and labor law evasion, conspiracies in restraint of trade, political bribery, influence peddling and even murder.

Violations of the public trust are common. Outright lawbreaking is just part of doing business. Prosecution and punishment is rare. When global corporations have wealth greater than many countries and even employ their own private armies, this should surprise no one. If it takes leakers and hackers to liberate accurate information, than so be it. The leakers and the hackers are part of a non-violent resistance movement to the government and corporate madness that is engulfing our planet…

There is a growing ‘market for secrets’; WikiLeaks’ posting of 250,000 confidential, diplomatic cables has been called traitorous, treasonous and despicable – but could it also be prophetic?  According to Stewart Brand; “information wants to be free”, at the first Hackers’ Conference back in 1984, “because the cost of getting it out is getting lower and lower all the time.”  The growth of global computer networks and the creation of massive databases have led to the collapse of the information-price bubble, which makes it easier for hackers, activists and just about anyone else to become a WikiLeaks source.

This trend has coincided with rising distrust of government and corporations. Distrust provides motivation. The result is a ‘market for secrets’ that will certainly grow much faster than anyone’s ability to control it.  While much of the outrage about WikiLeaks and its founder, Julian Assange, has centered on the legal and national security implications of the releases, the real question is whether the movement toward forced transparency can be stopped.  In an interview, Assange tells Forbes‘ Andy Greenberg that his website is receiving more confidential information than he can find time and resources to publish.

Andrew Sullivan of ‘The Daily Dish’ observes that the many governments face a difficult dilemma:  “Trying to crack down on the organization would only give it more publicity, which would allow it to attract more leaks.” As Greenberg notes, many of the top minds in the field of cyber-security (including former hackers) now work for the Defense Advanced Research Projects Agency, which created the Internet. The agency’s tactics include network forensics, the process of monitoring every ‘fingerprint’ on a server to track the actions of data trespassers. While this approach won’t seal the floodgates, it may deter the next leakers.

In the report “The Value of Corporate Secrets” by Forrester writes: Proprietary company secrets generate revenue, increase profits, and maintain competitive advantage. In addition, custodial data such as customer, medical, and payment card information has value because regulation or contracts make it toxic when spilled and costly to clean up. Secrets that have intrinsic value to the firm are always specific to the enterprise’s business context. An interested party could cause long-term competitive harm if it obtains these secrets. Keeping proprietary knowledge away from competitors is essential to maintaining market advantage.

An interesting case of theft of trade secrets is about Xiang Dong (“Mike”) Yu, a former employee of Ford Motor Company, copied around 4,000 documents belonging to the company before he left the company, without notifying anyone of his plans or giving notice, and traveling toChina. The documents have been evaluated and are said to worth between $50 and $100 million, and include designs of various Ford car components such as the engine/transmission mounting subsystem, the electrical distribution system, the generic body module, and others. Almost two years after he left, he accepted a job offer with the Chinese-based Beijing Automotive Company and shared the documents with his new employer…

As Andy Greenberg points out, financial reform has expanded whistleblower incentives to reward corporate employees who report illegalities.  It offers the conscience-stricken and vindictive alike a chance to publish documents largely unfiltered, without censors or personal repercussions, thanks to privacy and encryption technologies that make anonymity easier than ever before.  What’s a corporate CEO to do?

The choice is simple; either run an honest business or risk painful, massive leaks of information. “In the struggle between open and honest companies and dishonest and closed companies,” Greenberg says, “we’re creating a tremendous reputational tax on the unethical companies.”  Most people don’t become whistleblowers when they simply object to a management strategy. They go public when they feel they’ve been treated badly, or when they believe someone is violating the law.

For the rest of us, says Sullivan, it’s time to come to terms with a new reality:  “We live increasingly in a world without curtains or even veils… When the cost of leaking information is low… When leakers are motivated by incentives… It is clear that the business of publishing secrets is entering a boom market.”  Companies have plenty of good reasons to keep things under wraps; whether they’re trade secrets, upcoming products, or even confidential government contracts. However,  some businesses take things beyond what seems normal, going to great lengths to keep questionable information as secret, even going so far as to keep their entire company secret for years…

“The link between secrecy and deceit is so strong in the minds of some that they mistakenly take all secrecy to be deceptive” ~Sissela Bok

“Secrecy was Bernie Madoff’s hallmark. When the reporter for Barron’s pressed him for details, Madoff simply replied: It’s a proprietary strategy. I can’t go into it…”