The heightened level of attention to the proliferation of cyberattacks has yielded many outcomes, but none more notable than the recognition that responsibility for cyber risks no longer lies solely within the realm of IT. It now sits squarely in the domain of the C-suite and business leaders, with responsibility for oversight of management’s performance in cyberrisk identification, defense, mitigation, and response resting with the corporate board of directors.
The National Association of Corporate Directors (NACD) has been a leading voice advocating for board-level cyber risk oversight since the initial release of the NACD Director's Handbook on Cyber-Risk Oversight in 2014. The handbook was the first non-government resource to be featured on the U.S Department of Homeland Security’s US-CERT C3 Voluntary Program website. Along with providing guidance for directors in companies of all sizes and sectors, the handbook helps boards understand management's responsibilities around cyber preparedness and, more pointedly, provides questions directors should be asking of the senior executive team. Earlier this year, the handbook was re-issued with updated information on the evolving cyberthreat environment, and a host of new tools for boards such as cyberrisk profile assessments and cyber dashboards.
Board-level Cyber Literacy is Low, Discomfort High
NACD's most recent annual governance survey of public-company directors highlights the ongoing discomfort board members experience when it comes to cyber literacy. According to the survey, only 19% of directors believe they have a high-level understanding of the risks associated with cybersecurity, and 59% find it difficult to oversee those risks.
These statistics speak to a larger problem: cybersecurity needs to be prioritized and approached holistically as an organization. The reason for this is simple. Cyber risks have an impact well beyond technology: they affect new business plans, product and service offerings, mergers and acquisitions, supply chain and purchasing decisions, major capital investment decisions such as facility expansions and upgrades, R&D processes, and HR policies. For that reason, cybersecurity should be woven into boardroom discussions on all of these topics. If business leaders and directors continue to view cybersecurity as mainly a matter for the IT department, they will leave their companies – and, in turn, the U.S. economy – exposed to significant risks.
As part of the effort to strengthen investor trust and public confidence in board-level cyber risk oversight practices, NACD has created the first credentialed course dedicated to board member cyber literacy. The NACD Cyber-Risk Oversight Program was launched in concert with Ridge Global —led by former Governor Tom Ridge, first US Secretary of Homeland Security — and the CERT Division of the SEI, a federally-funded research and development center sponsored by the Department of Defense, based at Carnegie Mellon University. The program is a first-of-its-kind online course that goes in-depth on issues such as cybersecurity leadership, effective security structure, and the role of the board. Leaders who complete the course and pass the exam earn the CERT Certificate in Cybersecurity Oversight, issued by Carnegie Mellon.
Securities and Exchange Commission leaders have called cybersecurity "the biggest risk to the financial system," also noting that "boards that choose to ignore, or minimize the importance of cybersecurity oversight responsibility, do so at their own peril." NACD-s cyber-risk oversight program addresses this call to action; the certificate demonstrates to investors, customers, employees, and regulators that participating directors are committed to staying cyber-literate.
A common saying in the security world is that "there are only two types of organizations: those that have experienced a breach, and those who aren't aware that they've been breached." While no organization is 100% protected, the board plays an important role in assessing a company's cyber preparedness. The intent of the NACD Cyber-Risk Oversight Program is not to turn board members into technologists; it's to ensure the board is aligned with management in setting the company’s cyber risk profile, and maintaining the organization's cyber resiliency.
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