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Much of a company’s value is largely based on intangibles such as brand or reputation, and security is seen as the second biggest factor affecting brand (just behind ethics and integrity, and ahead of products and services—Deloitte [email protected], 2015). Given the increasing number of high profile breaches and resulting class action suits (not to mention increased regulatory attention), security is a core tenant in the stable of board responsibility.
On this topic, Bret Arsenault (Microsoft CISO) argues that security has transcended from IT to the Board. And whimsically (but all too accurately), that the CISO is the least interesting C-level to the Board, until the CISO is the most interesting person to the Board. This falls in line with my thinking that CSO is actually stands for Chief Scapegoat Officer.
Of course Bret covered standard topics like security governance, incident response planning and employee training, but he touched on a couple of nuggets. First, that a CISO must understand their employee demographic. Baby Boomers, Gen -X, Gen-Y, and Millennials, all communicate differently. They use different tools and technologies and it’s important to recognize this and codify the associated risk.
The second nugget Bret uncovered was to consider the past, present and future. Importantly, he argues that you must identify the technical debt in the organization (outstanding work required to mitigate identified risks) and accrued liability—the future cost of bad decisions made today. Perhaps bad decisions is a touch harsh. It’s the decisions we make that incur a risk we cannot immediately mitigate (think, BYOD, cloud, etc.).
So how many board of directors are talking security? According to Vercode who partnered with the NYSE to survey nearly 300 board members, found that nearly 80 percent of boards regularly address cybersecurity. And for good reason (see above). And while 90 percent feel companies should be liable for data breaches, only 66 percent were confident that their companies were doing enough to protect their data. Other notable data points:
So, how do boards walk what they talk? Where is the line that demonstrates to a regulatory body that a company has reasonable measures in place to protect their data? Or worse, how do they demonstrate to a court that the company met the standards of care, and negligence did not lead to the breach? So far, the only answer that I have is that you will know where the line is, when a regulator, court or insurer tells you that you have crossed it.
Mark is a cybersecurity evangelist who has spent significant time researching and speaking to peripheral factors influencing the way that legal firms integrate cybersecurity into their day-to-day operations.