Target CFO John Mulligan ably represented the company in testimony before a Senate committee on Tuesday, but the one in the hot seat should have been chairman, president and CEO Gregg Steinhafel.
Recall when the nation’s bankrupt automakers needed a bailout, it was the CEOs of General Motors and Chrysler who appeared before legislators. And when big banks came under fire for their role in the housing crisis it was the financial firms’ CEOs who endured lawmakers pointed questions.
That wasn’t the case Tuesday when Target sent Mulligan to explain why the company was susceptible to a data breach and elaborate on the rationale behind why it delayed alerting customers their information had been obtained by cyber thieves. He did a commendable job and went beyond offering simple explanations to detailing a course of action and a major commitment to prevent a similar occurrence.
During his testimony, Mulligan said Target will equip its proprietary REDcards and all of its store card readers in the U.S. with chip-enabled smart-card technology by the first quarter of 2015, more than six months ahead of previous plans. The accelerated timing is part of the company’s $100 million effort to put in place chip-enabled technology in all of its roughly 1,800 U.S. stores.
“Updating payment card technology and strengthening protections for American consumers is a shared responsibility and requires a collective and coordinated response. On behalf of Target, I am committing that we will be an active part of that solution,” Mulligan said.
The company’s action in the aftermath of it massive data breach is admirable, but what’s less worthy of praise is the fact that CEO Steinhafel sent Mulligan to D.C. to offer the mea culpa on Target’s behalf. Steinhafel apologized in videos on the retailer’s website and he did the rounds on television talk shows immediately after the breach was disclosed, but when it came to offering an apology and detailing the company’s course of action before an august Senate subcommittee the matter was delegated to the CFO.
The issue of payment methods and data security may in fact fall under the purview of the company’s CFO, but Steinhafel was conspicuous by his absence when it mattered most.
“At Target, we take our responsibilities to our guests very seriously, and this attack has only strengthened our resolve,” Mulligan said in his testimony. “We will learn from this incident and, as a result, we hope to make Target and our industry more secure for consumers in the future.”