Boards Need To Step Up Or Risk Cybersecurity Fines

Uploaded on 2023-02-01 in FREE TO VIEW, BUSINESS-Services-Law

Protecting companies against the threat of cyber attacks used to be something that the IT department would be tasked with. Leaving tech to the tech experts seemed to make perfect sense. So long as the Board had appointed the right people for their job, many Board members felt their work was done, aside perhaps from hearing the occasional update from the IT department manager.

What would be the point of interfering in matters that may be outside of their areas of expertise, after all? Let tech deal with tech, to free the Board up for more pressing matters.

The Daily Threat Of Cyber Attacks

But now, cyber attacks are not distant threats that happen to other organisations; they’re a daily reality, and no company is safe, regardless of their industry or size. A survey by the UK Government revealed that in 2022, 39% of UK businesses identified a cyber-attack. Out of the organisations who had reported attacks, 31% of businesses and 26% of charities estimated they were attacked at least once a week.

Fines - Insult To Injury Or Just Desserts?

On top of the sheer number of attacks, the costs to businesses can be staggering. According to CISCO, data breaches are likely to cost, on average, 20% of a company’s turnover. There is also the high likelihood of businesses being hit with a substantial fine. Insult to injury? Perhaps, but when a Board has failed to take adequate preventative measures to safeguard their customer data, a fine may be viewed as appropriate punishment. A vital lesson in standing up and taking responsibility.

What Can The Board Do?

If the recent £4.4m fine imposed on Interserve by the ICO has taught companies anything, it should be that understanding cybersecurity risks and investing in all the right technology is simply not enough to protect themselves from receiving a hefty fine.

Like many firms, Interserve wasn’t ignorant to the real threat of an attack, nor was it reluctant to put the right tech in place. Where they failed was monitoring that tech and taking action when suspicious activity was flagged. They fell at the final hurdle and that cost them - big time.

Remaining resilient to the ever-evolving threats of cyber-attack requires a robust strategy driven by the Board that is constantly maintained and monitored. To put it simply, firms without watertight cyber resilience strategies are risking everything.

What is certain is that more eye-watering fines will continue to hit the headlines.

There is a tendency for Boards to think that once they’ve invested in cybersecurity tech, they’ve done their job. This is a dangerous assumption. The vital part in a successful cyber strategy, which is still missing in all too many companies, is a security operations centre (SOC) service - experts who know how to monitor the tech, interpret the data and what to do when an alert is flagged.

Having all the tools but lacking a SOC service is only going halfway to protecting your organisation - which, in today’s cyber threat environment, isn’t nearly far enough. A SOC service provided by a trustworthy and reliable supplier means the difference between resilience and total vulnerability.”

Delivering Competitive Advantage

The Financial Times published the results of a survey by MIT Sloan and Proofpoint, a California cybersecurity company, which showed that Board members’ biggest fears on encountering a cyber attack, were data being made public, reputational damage and revenue loss.

All these fears are well-founded, but what about the potentially devastating effects of being fined? Not to mention the cost of cyber insurance after a fine has been imposed. And then there’s losing out to competitors - many organisations are now refusing to work with partners who do not have a SOC service in place, as it means their data is vulnerable.

We have customers who came to us because they knew their cyber-attack resilience was weak and it was causing them to lose sleep. Having a SOC service in place gives Board members enormous reassurance that they’re doing everything they can to mitigate an attack - and can prove it if the ICO ever does come knocking.

Rob Demain is CEO & Founder of e2e-assure

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