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Press Release: UK CIO survey reveals companies leaving themselves open to huge financial loss |
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23 August 2005: Cryoserver, the leading forensic email compliance company, today reveals the results of its survey of 100 UK CIOs on the readiness of their email systems to meet strict reporting regulations. The worrying findings show that CIOs have little confidence in the compliance of their systems and are aware that employee misuse could result in heavy fines or prosecution, yet are knowingly not investing sufficient funds to improve them.
The most common single reason for disciplinary action in the UK is the sending of unauthorised emails whilst 27% of Fortune 500 companies have fought email harassment claims . Cryoserver carried out the UK research to measure CIOs’ perceptions of the importance email storage and retention, as well as gauge their future plans.
Key findings from the research show:
• No confidence - 80% of respondents have little or no confidence in their company’s email systems’ compliance with regulation, yet only 18% feel that current investment in their systems is sufficient
• Retrieval problems - 68% had to retrieve emails in the last year to resolve a compliance issue – with more than two-thirds (67%) being for ‘traditional’ legal reasons. This implies that all companies need to be email-ready, not just those affected by regulation such as financial services
• Under scrutiny - 73% of respondents’ email systems have never been scrutinised by a third party such as an external compliance expert. Nearly three quarters of CIOs therefore have no accurate measure of what extent their email system could be leaving them open to heavy fines or embarrassing court cases
• Under-estimating - When asked what they thought was the typical cost to a company of a law suit resulting from mis-use of email systems, nearly half of CIOs estimated less than or equal to £50,000. However, there are many case studies of the cost being far greater. Just one example is Perot Systems, the European outsourcing company, that claimed it would cost more than £4 million to search five years of email when defending itself in court against claims of a defamatory reference for an ex-employee
• Smoking gun - 99% of CIOs feel that email could have a negative impact on their company’s reputation – yet as detailed above, are knowingly not investing sufficient funds to strengthen their position
Cryoserver gives companies the peace of mind that they will not face legal action on account of their email system at a time when high profile cases are rife of employee email mismanagement costing companies huge sums of money and significant damage to their reputation.
Michael Decker, Managing Director of Cryoserver, said: “Many workers and indeed companies themselves do not realise the consequences of email misuse in the workplace, and many people will use their work email just as they do their personal email.
“To combat email misuse and therefore make themselves less liable to litigation or regulator fines, we recommend that companies install and make known to their employees, an email forensic compliance system alongside an email policy that regulates employees’ use of network communications. This reduces the liability to the organisation whilst protecting the employee and ensures that employees know what the likely penalties are for misuse. The findings from our research shows that this isn’t happening for the most part – many organisations are leaving themselves open to very humiliating and costly court cases.”
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