Privacy: What CEOs Need to Know

Good privacy is good business, a fact that more than a few CEOs have had to learn the hard way. Over the past year, the chief executives of airlines Jet Blue (JBLU ) and Northwest (NWAC ) have both faced criticism -- and federal investigations -- when it was revealed that they had improperly shared customer travel data with federal agencies. And on Mar. 30, telecom giant MCI paid a $100,000 fine to Indiana -- a state record -- for continuing to interrupt the dinners of households that had signed up for the state's do-not-call list.

Privacy doesn't have to be all stick and no carrot, however. CEOs who proactively protect customers' privacy can avoid humiliating headlines -- and enjoy a boost in business. According to a recent Harris Interactive study, nearly 50% of consumers say they would buy more frequently and in higher volumes from companies they know have sound privacy practices.