Cyber flaws in majority of FTSE 350 boards

Cyber flaws in majority of FTSE 350 boards

Cyber security is now firmly cemented as a key issue in the boardroom of FTSE 350 companies, but this isn’t reflected in the training that management receive in dealing with cyber incidents.

In a survey carried out by KPMG as part of the Government’s Cyber Governance Health Check, over half (54 per cent) of businesses place cyber risk as a top group risk when compared with other threats that a company faces – up from the 29 per cent who did so in 2014. Boards are also more likely to debate and agree their tolerance for cyber risk than in previous years. More than half (53 per cent) have this “clearly set and understood”, an improvement on the 33 per cent from 2016.

However, it’s clear that even though cyber as an issue is recognised and understood more than ever by boards, the training in how to deal with the issue is still lagging.  Over two-thirds (68 per cent) said they have not received any training to deal with a cyber incident, and only two per cent stated they have received comprehensive training. More worryingly, 10 per cent of businesses revealed that they do not have a plan in place to respond to a cyber incident.

Paul Taylor, UK head of Cyber Security at KPMG, said, “Cyber-attacks continue to pose a growing threat to business. While cyber security has cemented itself onto the board’s agenda, they often lack the training to deal with incidents. This is hugely important as knowing how to deal confidently with an incident in the heat of the moment can save time and money. The aftermath of a cyber-attack, without the appropriate training in managing the issue, can result in reputational damage, litigation and blunt competitive edge.”

With General Data Protection Regulation (GDPR) less than a year away, 46 per cent of boards still do not review and challenge reports on the security of their customer’s data – even though this figure has decreased by 15 percent from last year. Yet, 71 per cent of businesses describe themselves as somewhat prepared to meet the requirements of the GDPR, but only 6 per cent say they are completely prepared.

When asked which GDPR requirements were causing businesses the greatest concern in terms of meeting compliance, 45 per cent of respondents cited an individual’s rights to personal data deletion.

Taylor said, “It’s worrying that with less than a year to go, many organisations still have a lot to do. GDPR will affect organisations in the UK and worldwide that have any dealings with consumers and businesses in EU member states. The regulation sets a new bar for customer and client privacy expectations, but the truth is that many just don’t understand what they have to do and how to deal with it.”

“Boards need to take GDPR as a warning to rethink how they collect, store, use and disclose personal information. Done right this can transform their business model helping match services to client needs, done wrongly then they run a growing risk of data breaches and subsequent enforcement action with the prospect of fines up to 4 per cent of global turnover.”

Other findings include:

  • 31 per cent of boards receive comprehensive and informative management information on cyber risk. (Increase of 10 per cent from 2016 Health Check).
  • 57 per cent of businesses have a clear understanding of the potential impacts resulting from a loss of, or disruption to, key information or data assets. (Increase of 8 per cent from 2016 Health Check).
  • 50 per cent of boards review and challenge reports on the security of their customer’s data. (Increase of 11 per cent from 2016 Health Check).
  • 53 per cent of boards receive only some information on cyber risk. (Decrease of 4 per cent from 20116 Health Check).

“Board members need to take collective responsibility for cyber security and consider it in every aspect of the business. If they can do that, then perhaps cyber security will become mainstream and a vital component of doing business in our digital world,” concluded Taylor.

 

 

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Posted on

August 21, 2017

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