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Public embarrassment and financial loss probably top the list of what corporate board members most want to avoid - personally as well as on behalf of their companies. That is why, with the rise in frequency and sophistication of cyber-attacks, and increasing media coverage, board members are more likely to ask, “How well are we protected?”
An average of more than one successful cyber attack is incurred by each company per week according to the Ponemon Institute’s Second Annual Cost of Cyber Crime Study in 2011. That is a 44 per cent increase over 2010. And, that’s only the breaches that have been publicly disclosed, which probably reflects only a portion of the actual breaches that take place.
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Moreover, various hacker groups and hacktivists, such as Anonymous, are making business leaders more aware of the dangers of cyberattacks.
To compound the reputational damage, the data breaches of 86 per cent of the victimised organisations cited in that 2011 study were discovered by other parties, and not the hacked entity. Often the attacks were uncovered by law enforcement agencies or third-party fraud detection programs.
This is a strong and urgent wake-up call for company managements to proactively frame a cybercrime protection conversation with the board. Sure, some board members, “don’t understand that IT risk is part of enterprise risk,” according to Jody Westby, an adjunct distinguished fellow at Carnegie Mellon’s CyLab, in a recent BoardMember.com interview. But why wait for the next cybercrime to make news, spurring a board member to ask, “Could it happen to us?”
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