Most business activity has technology implications. The risk of financial, competitive, and reputational damage is high.
Directors are responsible for managing cyber risk. Its management principles are the same as for other areas of risk. Directors must identify the specific risks, determine risk appetite, and act to deal with the risk.
This guide sets out five principles to help boards understand and monitor cyber risk, develop strategies for seeking assurance, and oversee management. It also poses questions for directors to ask management.
There are five core principles for boards in their oversight of cyber risks.
Directors should approach cybersecurity as an enterprise-wide risk management issue, not just an IT issue.
Directors should understand the legal implications of cyber risk as they apply to the company’s specific circumstances.
Boards should have adequate access to cybersecurity expertise. Discussions about cyber-risk management should be given regular and adequate time on the board meeting agenda.
Directors should set the expectation that management will establish an enterprise-wide cyber-risk management framework.
Board and management discussion of cyber risks should include identification of which risks to avoid, which to accept, and which to mitigate or transfer through insurance, as well as specific plans associated with each approach.