CISOs and technology leaders are tasked with the responsibility to accurately report an organization’s cyber risk to its corporate Board and executives. As cybersecurity becomes a mounting concern for organizations across all industries, it’s more important than ever to ensure that all stakeholders come to a mutual understanding regarding the company’s security needs and business goals.
Many Boards now find themselves at the forefront of dealing with cybersecurity issues, often without technological training. For this reason, it’s crucial to prioritize data-driven information when building a cybersecurity Board report and establish a framework that can bridge the gap across both sides.
Why is cybersecurity Board reporting important?
As individuals outside of IT become more aware of cybersecurity and its role within an organization, corporate Boards are becoming much more involved in data and privacy security. Even with regular reporting, there is often still a gap in understanding between the CISO and Board members.
An effective cybersecurity report needs to be quantifiable and should frame the risks as they pertain to the business’s goals, strategies, and risk tolerance. Avoid using technical jargon, and focus on actionable data so the Board knows where the organization stands and the next steps that need to be taken.
5 best practices for building a cybersecurity Board report
The most important thing to remember when building a cybersecurity Board report is understandability. Consider the technical training of the members, and try to avoid reporting on every single risk facing the organization. They are typically managing multiple facets of the business at once and security teams need to be able to succinctly demonstrate why the data being presented matters.
Here are 5 best practices for building a cybersecurity Board report:
1. Follow cybersecurity reporting guidelines
The Securities and Exchange Commission (SEC) provides guidance to companies regarding the responsibility of reporting to shareholders and the Board of directors, and heavily stresses the importance of cyber-related disclosures. In 2018, the SEC stated, “the Commission believes that it is critical that public companies take all required actions to inform investors about the material cybersecurity risks and incidents in a timely fashion.”
2. Determine the organization’s risk tolerance
Organizations are often managing multiple cyber vulnerabilities at once, but not all of them are worth sharing with the Board. Work with them to set a risk tolerance level and determine at what point a vulnerability becomes large enough to warrant their attention. This will act as a guide for determining what is or isn’t worth reporting on and gives the security team a standard to compare performance against.
3. Clearly define the threat environment
Avoid reporting on general security metrics and KPIs that don’t specifically relate to the organization. Instead, the Board report should assess the greatest risks facing the company so that members can gain a better understanding of the threats that may impact the business’s goals or bottom line.
Share relevant information like the number and frequency of prior incidents, the preventative programs currently in place, and the financial and reputational impact that additional risks pose. Additionally, benchmark the organization’s cybersecurity posture against those of industry peers and competitors using data-driven security ratings to better prioritize threats.
4. Keep the report financially focused
Cost plays a big role in cybersecurity reporting. The cost of a potential investment for mitigating risk needs to be reported to the Board, as well as the potential financial implications of a data breach, including business loss, legal costs, and reputational damage. It’s important to prioritize cost-based initiatives according to the risk they pose and the subsequent damage that may result from said risks. This ensures that the report is focused on relevant financial information and helps avoid confusion or misplaced funds.
5. Set realistic expectations for deliverables
The threat landscape is constantly changing, and that means that the programs and policies in place for mitigating risk have to be regularly updated in order to stay ahead of threats. It’s important to set realistic expectations for deliverables, taking into account the time, budget, and available resources of the security team.
How security ratings can help with cybersecurity Board reporting
Board members and executives play a crucial part in ensuring that the proper programs and security policies are put in place to mitigate risk. Standardized and quantifiable security ratings from SecurityScorecard can help them more easily oversee the organization’s cyber risk.
SecurityScorecard’s A-F rating system simplifies executive-level Board reporting by analyzing an organization’s cyber risk across 10 groups of risk factors, helping to more productively frame cybersecurity as it relates to business goals and strategies. By applying threat intelligence and comparing performance to a risk threshold, Boards have full visibility into the network and can confidently make informed decisions based on the actionable insights identified by the platform.