The pandemic has raised the threat of cyber attacks for businesses. Many reports show an alarming increase in incidents in the last year, with the attack methods of cybercriminals becoming increasingly sophisticated. Despite this, boards are still not taking the initiative when it comes to cyber security.
With this in mind, Ash Patel, Head of Cyber at ECI Partners, the growth-focused mid-market private equity firm, who advises the boards of the portfolio on how to identify and understand the scale of the cyber risks they face, shares his thoughts on how businesses can mitigate the cyber risks facing their operations.
Why CEOs should care?
4 in 10 businesses suffered a breach or attack last year; of those, more than a third reported negative impacts, ranging from financial loss to business disruption. However, the consequences of a cyber attack go well beyond that, businesses could face:
- Loss of crucial intellectual property to a rival, allowing them to secure a competitive advantage.
- Punitive regulatory sanctions with fines of up to 2% of a company’s global revenues, as mandated under the General Data Protection Regulation (GDPR).
- Reputational damage and loss of customer revenue with more than one in four consumers stating they would stop doing business with a company following an incident compromising their data security or privacy
“The financial and reputational fallout from a cyber attack can create huge problems for mid-sized businesses. And with cybercrime showing no signs of slowing down, it’s imperative that businesses understand the threat and are proactive in mitigating the dangers.
“Tackling these risks is not a one-size fits all approach. Businesses need to identify the gaps in their own cyber security defences, make their own decisions about acceptable risks, and find the right strategies to counter them,” comments Ash Patel.
How CTOs can push cyber security up the board agenda
In order to truly protect the business from breaches and attacks, it’s important that the board makes cyber security a priority. CTOs have a responsibility to make this happen, and the best way of achieving this is:
- Talk to boards in the language of the business: Technical IT jargon is far less likely to resonate strongly with the board than a discussion about how cyberattacks threaten the business’s value story.
- Focus on future-proofing as well as today’s operations: It is important to not overlook the threat that cyber poses to innovation. Boards’ efforts to pursue a digital agenda may be undermined by cyber risk if it is not properly understood and planned for.
- Concentrate on areas of weakness: Conduct cyber gap analysis focusing on the areas of risk where controls are often weaker, and take steps to mitigate these specific risks. For example, the human link is often one of the weakest, so firms should invest in regular staff training to mitigate these.
- Learn from experience: Spend time discussing incident reports with the board, focusing in particular on what the company has learned – and what is required to prevent a reoccurrence of that type in the future.
- Agree on targets and monitoring: With a set of key performance indicators included in each board pack, the board will have a clear view of how the company is performing and where they might need to divert more resources to.
“Cyber security, and the risk management associated with it, is and should be a board-level responsibility. For businesses that don’t have their own cyber team or specialist, it falls to the CTO to work with the board, to educate them on the risks, strategy, performance indicators, and reporting.
“Once CEOs and the board have a full grasp of cyber in context of their business, they will be better equipped to not only protect against and properly handle potential attacks, they will also be able to pursue the business’s digital transformation and growth priorities,” Ash continues.
