Cybersecurity Risks for Boards and CEOs – Time to Work More Closely with CIOs and CISOs

17 March 2015 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

Recently there was a report about the Sony breach which stated that as “a result of this pervasive and devastating attack, combined with other breaches, cybersecurity is no longer a CIO problem, but now a CEO and board level problem, given potential for business disruption.” The InformationWeek DarkReading March 11, 2015 report entitled “6 Ways The Sony Hack Changes Everything” included as number “2. Cybersecurity risk is squarely a board and CEO issue”:

Boards and executives are going to have to deal with cybersecurity risk like they do with legal, regulatory, geopolitical, or labor risk. It has to be central to the way business leaders think, and a planning consideration for those keeping sensitive information or transacting commerce online.

CEOs must have the same view of the digital realm, working with the CIO and Chief Information Security Officer [CISO], to better understand the risk.

Also number “6. Business executives are now much more aware of cybersecurity risks” includes this insight:

Savvy CEOs and concerned outside board members are well-suited to ask tougher questions about cybersecurity risk more frequently, which will make their organizations more resilient to the risk of sophisticated attackers, or at least be more prepared when they experience a full-blown cybersecurity failure.

Insurance costs will increase as identified in number “5. Cybersecurity insurance and its coverage just got more expensive”:

 To date, cybersecurity insurance has focused on covering the risk of data loss, including the cost to notify clients whose data was lost during a breach. The focus has been on that facet of cybersecurity risk, not total business interruption or full-blown disaster recovery. Sony Pictures probably changed the expected loss number, which will likely have a ripple affect across the industry, driving up cybersecurity insurance premiums.

Here’s the complete list of all 6 Ways Sony impacts everything:

  1. Company survival is now a central concern for companies dealing with cybersecurity risk.
  2. Cybersecurity risk is squarely a board and CEO issue.
  3. Sophisticated cyber attacks combined with a credible terrorism threat is a new hybrid.
  4. We are more susceptible to this attack, and have few options to respond.
  5. Cybersecurity insurance and its coverage just got more expensive.
  6. Business executives are now much more aware of cybersecurity risks.

Whether Sony should get the credit or not is beside the point, the critical point is that Boards and CEOs need to learn more and work more closely with CIOs and CISOs.

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