Many companies view cybersecurity as the province of IT, treating it as a separate entity. In fact, cybersecurity should be an integral part of your entire corporate strategy.
According to the Harvard Business Review, a cyber breach does not just result in downtime and the need to use IT resources to fix the problem. It can also result in:
- A short-term fall in stock prices for publicly traded companies. Some companies don’t recover.
- Extensive immediate costs, including ransom payments, legal fees, and increased audit fees.
- The need to raise prices, costing you customers.
- Downgraded credit rating.
Additionally, it can also result in less tangible issues such as reputational damage.
Why Cybersecurity Belongs in Corporate Governance
Not to say that you should not trust your IT department, but cybersecurity affects your entire company and requires buy-in from everyone. Many breaches result from human error, such as falling for a phishing attack or being careless with credentials. Additionally, business email compromise (BEC) and similar scams can impact internal communication, requiring mitigation and prevention tactics that extend beyond IT.
Because breaches impact shareholder value, reputation, and business continuity, they need to be integrated into your overall risk management strategy. Also, depending on your business, you may face regulatory pressure. If you operate within the European Union, you are required to comply with the GDPR. You may also have industry-specific requirements to address.
Involving leadership in cybersecurity also helps build security into everything, inherently, rather than having it be an add-on.
Key Components of Cybersecurity Governance
Here are the key components of governance to help you bring cybersecurity into your overall strategy.
Board Oversight
Your board might not be cybersecurity experts, although they should listen to them. However, they are strategic experts and should educate themselves so they can set an appropriate strategy. This includes your risk appetite, which influences decisions such as balancing user convenience and security, as well as determining whether to obtain cybersecurity insurance.
Risk Management Integration
Enterprise Risk Management (ERM) is a strategic approach to risk management that considers the entire organization. Cybersecurity needs to be integrated into this process, which includes assessing your level of risk based on industry and exposure (for example, healthcare is often a target of cyberattacks). ERM also helps develop a culture that effectively manages risk. ERM encompasses various types of security, including physical security, as well as compliance, legal, financial, and operational risks.
Policies and Procedures
Technical cybersecurity, such as patching software, is essential. However, the significance of human error makes clear frameworks for incident response, access control, and data protection vital. You can install multi-factor authentication, but then have somebody connect their unprotected cell phone to the network. Cybersecurity policies make security everyone’s responsibility and strengthen your culture.
Accountability and Reporting
Who is responsible for what? When and how should employees report a problem? Ensure that you have established roles, responsibilities, and KPIs to monitor cyber health, whether you are the network manager in an IT setting, tracking systems, or the office administrator, and know how to set a strong password.
Embedding Cybersecurity in Corporate Strategy
Cybersecurity is often seen as just protecting your business, but, in fact, your cybersecurity initiatives and policies support your business objectives. What data is most important? What needs to be locked down?
Resources need to be allocated to support critical systems, and a strategy is necessary to ensure that cybersecurity is prioritized, balanced, and never becomes a line item that can be cut from the budget. Ensure that a system is in place for approving cybersecurity-related projects and that they are aligned with business goals. For example, when replacing a legacy database, consider not only the ease and speed of use but also look for systems with security built in from the start.
Practical Steps for Implementation
So, how do you further embed cybersecurity into governance? Here are some practical steps:
- Start with a complete cyber risk assessment. Then schedule periodic audits. Ensure leadership is aware of your current position and your desired future goals.
- Develop and maintain a cybersecurity framework. NIST or ISO 27001 are good starting points, then customize the framework to your company’s exact needs, choosing what is relevant to you.
- Determine appropriate cybersecurity KPIs and incorporate them into board and executive reporting. Have somebody who can explain to leaders what the KPIs mean and how they are achieved.
- Promote a culture of cybersecurity awareness. Train employees to recognize threats in both their work and personal lives, so they become cybersecurity advocates.
- Establish incident response plans with board-level oversight and management. Train people on these plans and ensure everyone knows, for example, to disconnect and shut down a system infected with ransomware immediately.
Benefits of Cybersecurity-Integrated Governance
We’ve discussed briefly why you should consider this approach, but there are numerous benefits to integrating cybersecurity effectively into governance. They include:
- Stronger risk mitigation and prevention. Integrating cybersecurity helps create a culture in which everyone takes part, reducing the risk of breaches.
- Improved confidence among investors, clients, regulators, and employees.
- Improved risk visibility enables you to make better decisions, not just in terms of risk management, but also for future planning.
- Improved operational resilience. You are less likely to experience downtime due to breaches and will ultimately spend less time on audits.
Challenges and Considerations
None of this means that cybersecurity governance is easy. First, there is a resource cost associated with this that must be balanced against your other business priorities. While there is a level at which you must invest in cybersecurity, you still need to maintain a balanced budget.
Threats and regulations are constantly changing and staying up to date on everything you need to know while handling other business responsibilities can also be challenging. This is often where a good cybersecurity consultant comes in. Board members may also lack cyber-literacy themselves. Reverse mentorship, where board members are assigned to younger, cyber-literate mentors who can help them catch up, can be highly effective here. Make sure that board members and leaders take any cybersecurity and cyber hygiene courses offered.
The last challenge is third-party risks. You can’t always control what people do, but a key part of cybersecurity governance is vetting your vendors and suppliers and ensuring they meet your cybersecurity standards.
Cybersecurity is not an add-on or just a lock on the digital door. It must be a core component of corporate governance, enabling proactive planning, enhanced oversight, and effective risk management.
If this seems overwhelming, there’s plenty of help available. Your board and executives should be working on assessing your governance structures and embedding cybersecurity, but they should also consider contacting Yobihouse to book a consultation. Let us help you navigate the complexities of cybersecurity governance, not just to protect your data but also to support your entire business moving forward.
