The impact of cyber threats and incidents isn't limited to IT departments. They have a ripple effect throughout the organization, profoundly affecting operations, cyber strategy, and reputation. As a result, the board's mission to oversee and manage these risks is increasingly complex and critical, reflecting a broader responsibility as reflected in new legislation and regulations.
Cyber risk is undeniably a business risk. Boards and executive management must ensure that cyber risk strategies align with business objectives and that adequate resources are deployed to safeguard the organization's critical digital assets and infrastructure. Presenting data-driven, risk-based reports to the board ensures that executives are better informed when making IT budget decisions and improving their cybersecurity oversight.
While boards may have a high-level awareness of cyber risks, they often lack the depth of understanding of cybersecurity issues. Though, according to the 2023 NACD Director's Handbook on Cyber-Risk Oversight, boards awareness is improving among board members. CISOs and IT teams can use CRQ to bridge the gap and to bring data-driven insights and present cyber risks to the board in financial terms.
Cyber risk quantification uses a common language so that cyber threats, risk appetite, tolerance, and definitions of materiality are consistent. This consistent communication ensures alignment across all levels, leading to better cybersecurity governance and oversight.
Emerging regulations like DORA, and rules from the SEC and the German IDW mandate specific disclosures and practices. By effectively communicating risk to the board, organizations stay ahead of compliance requirements.
CRQ helps bridge the gap between IT and business objectives with risk-based and data-driven reports, so that decision-makers can prioritize both security and profitability.
CRQ takes risk appetite into consideration when assessing the financial impact of cyber incidents and how to implement controls to reduce the potential impact, bringing value to your cybersecurity strategy.
You can trust that our CRQ solutions and services not only help you meet but exceed the latest regulations where you operate.
Unlock the power of data-driven insights with cyber risk quantification, and ensure your leadership is equipped with clear, actionable intelligence to navigate the changing digital landscape.
By implementing a risk-based CRQ approach and leveraging the guidance from the 2023 NACD Director's Handbook on Cyber-Risk Oversight, boards can meet the compliance requirements of evolving regulations.
DORA applies to critical third parties that provide information and communication technology (ICT) services to financial firms. Organizations must ensure that they can withstand, respond to, and recover from all types of ICT-related disruptions and threats.
Public companies are required to disclose material risks that could affect their financial conditions or operations. The SEC also requires the disclosure of a material cyber incident within four days of its determination.
As per IDW PS 340, publicly-traded companies in Germany must identify, quantify risks in financial terms and report all risks using CRQ methods including Monte Carlo simulations to build resilience and prepare for future cyber risks.
The board is better informed and can improve cybersecurity governance when cyber and technology risk is communicated using business metrics. We identify and quantify cyber risk in financial terms.
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The role of the board is to provide cyber risk governance and oversight. The board is also responsible for resource allocation, incident response planning and cybersecurity compliance.
The World Economic Forum in collaboration with PwC released a report on Cyber Risk and the board in 2021, included in the report are six principles that are designed to support board oversight and build a cyber-resilient organization:
1. Cybersecurity is a strategic business enabler
2. Understand the economic drivers and impact of cyber risk
3. Align cyber-risk management with business needs
4. Ensure organizational design supports cybersecurity
5. Incorporate cybersecurity expertise into board governance
6. Encourage systemic resilience and collaboration
CRQ methods can be used to effectively communicate with the board. Articulate the potential impact of cyber investment decisions on the organization's bottom line. Use data-driven insights to provide a clear picture of the potential financial loss, reputational damage, or operational downtime associated with various cyber threats. And propose solutions that demonstrate how cybersecurity investments will mitigate risk, improve operational efficiency, and ultimately contribute to the organization's financial growth and stability.
C-Risk is a recognized expert in Cyber Risk Quantification using the FAIR™ methodology. We provide CRQ solutions, advisory services and training.
