Corporate boards aren’t prepared for cyberattacks

Corporate boards aren’t prepared for cyberattacks

CEOs, board members need to bone up on cybersecurity and not leave those matters to CIOs, analyst says

Despite the scale and potential harm from such attacks, there’s wide recognition that corporate leaders, especially boards of directors, aren’t taking the necessary actions to defend their companies against such attacks. It’s not just a problem of finding the right cyber-defense tools and services, but also one of management awareness and security acumen at the highest level, namely corporate boards.”Our country and its businesses and government agencies of all sizes are under attack from a variety of aggressive adversaries and we are generally unprepared to manage and fend off these threats,” said Gartner analyst Avivah Litan, a longtime cybersecurity consultant to many organizations.”Some organizations do a better job than others, but those efforts are almost always led by CIOs, CISOs or business line managers and not by corporate boards, CEOs and executive management throughout government and the private sector,” Litan added.Litan said what’s needed is a national response and cyber protection plan, but said she fears that the federal government is “way too fragmented and politicized to make any real progress toward this goal.”

Threats against nationwide infrastructure, including the electricity grid, are “enormously serious,” she added. “Unless senior executives, corporate boards and other senior stakeholders get their act together, the threat actors will continue to win. I’m not sure how many more wake-up calls we need in this country.”

Litan’s worries seem to have reached some quarters of the corporate governance community. The National Association of Corporate Directors (NACD) recently released a survey of more than 600 corporate board directors and professionals that found only 19% believe their boards have a high level of understanding of cybersecurity risks. That’s an improvement from 11% in a similar poll conducted a year earlier.

The survey also found that 59% of respondents find it challenging to oversee cyber risk. The nonprofit NACD, which has 17,000 members, is working with security awareness firm Ridge Global and Carnegie Mellon University to create a Cyber-Risk Oversight program to educate corporate directors about the systemic risks of cyberattacks.

Litan said such education is important, but she also supports state and federal laws to require organizations to report cyber attacks so that customers and partners will know to change passwords and make other adjustments to protect sensitive data.

“Having a requirement to disclose is a great motivator to increase security to prevent future attacks,” Litan said. “No one wants their names in the news. That’s what corporate directors are most worried about, in fact.”

A majority of states have data security breach notification laws, but so far there’s no nationwide provision. California first enacted its notification law in 2003, and other states followed suit.

At the federal level, a number of U.S. senators have backed breach notification laws, but no bills have passed congressional muster. President Barack Obama proposed such legislation in 2015. With the January inauguration of Donald Trump as the next U.S. president, it remains to be seen whether a federal breach notification law will take effect in the next four years, or longer.

When Yahoo disclosed in September a separate hack dating back to 2014, U.S. Sen. Mark Warner, D-Va., renewed calls for bipartisan legislation to create a uniform data breach notification standard and co-founded the bipartisan Senate Cybersecurity Caucus. “Action from Congress to create a uniform data breach notification standard … is long overdue,” Warner said at the time.

One analyst, Jack Gold of J. Gold Associates, questioned whether a national breach notification law would be effective. “There are disclosure laws in many states and there are some government regulations that require disclosure, but I’m not sure it has any effect if companies lie about a hack or don’t disclose it,” he said.

Matt Hamblen

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