When a data breach or other cyber event occurs, the damages can be significant, often resulting in lawsuits, fines and serious financial losses. In order for organizations to truly protect themselves from cyber risks, corporate boards must play an active role. Not only does involvement from leadership improve cyber security, it can also reduce liability for board members.
To help oversee their organization’s cyber risk management, boards should ask the following questions:
- Does the organization utilize technology to prevent data breaches? Boards should ensure that the management team reviews company technology at least annually, ensuring that cyber security tools are current and effective.
- Does the organization have a comprehensive cyber security program that includes specific policies and procedures? Boards should ensure that cyber security programs align with industry standards and are audited on a regular basis to ensure effectiveness and internal compliance.
- Has the management team provided adequate employee training to ensure sensitive data is handled correctly? Boards can help oversee the process of making training programs that foster cyber awareness.
- Has management taken appropriate steps to reduce cyber risks when working with third parties? Boards should work with the company’s management team to create a third-party agreement that identifies how the vendor will protect sensitive data, whether the vendor will subcontract services and how it will inform the organization of compromised data.
- Has the organization conducted a thorough risk assessment and considered purchasing cyber liability insurance? Boards, alongside the company’s management team, should conduct a cyber risk assessment and identify potential gaps. From there, organizations can work with their insurance broker to customize a policy that meets their specific needs.
Contact your insurance broker to learn more about cyber risk mitigation strategies that you can start using today to keep your business secure.
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