Imagine our organization has recently experienced a data breach where password hashes were stolen from our user database. As a cybersecurity professional, you need to prepare a clear, concise, and reassuring explanation for our management team. Your explanation must detail how our system's password security remains robust despite this incident. Specifically, address the following points:

1. Explain the fundamental difference between simple hashing algorithms (like SHA-256) and Key Derivation Functions (KDFs) such as bcrypt in the context of password storage.
2. Define what a 'salt' is in the context of password hashing.
3. Elaborate on why the use of a unique salt for each password is critical for preventing 'rainbow table' attacks.

Structure your explanation to be accessible and reassuring for a management audience, focusing on the security benefits and mitigation strategies in place with proper hashing implementation.