Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...
By Yin Wilczek
July 21 — Many C-suite executives remain surprisingly complacent about third-party cybersecurity due diligence, a recent study finds.
In addition, many boards may not be engaging enough on the issue of cybersecurity.
According to the report, “2015 U.S. State of Cyber Crime Survey,” 62 percent of the respondents indicated that they evaluate the security risks of third-party partners, while 57 percent said they do so for contractors.
However, only 42 percent of the respondents said they consider supplier risks. Moreover, only 16 percent of the respondents said they evaluate their third-party partners' cybersecurity more than once a year, while 23 percent said they do not evaluate third-party security at all.
Almost one-fifth of the chief executive officers, chief operation officers and chief financial officers polled said they did not worry about supply chain risks.
From the survey results, it is clear “that due diligence of business partners is far from adequate,” the report concluded.
Released July 16, the report was a joint effort by PricewaterhouseCoopers US, IDG Enterprise, the U.S. Secret Service and Carnegie Mellon University. It polled more than 500 executives from U.S. companies, law enforcement services and government agencies.
Among other findings, the report confirmed that cyber breaches are a growing threat. Seventy-nine percent of the respondents said they detected a security incident in the last 12 months. The respondents also reported 163 security incidents per organization on average, compared to 135 the previous year.
The study found that large organizations detected 31 times more breaches than small organizations.
Meanwhile, only 30 percent of the respondents said their senior security officers make quarterly security presentations to their boards, while 26 percent said such presentations occur only once a year. Twenty-eight percent of the respondents said their security officers make no presentations at all.
The study also found that 49 percent of boards view cybersecurity as an information technology issue rather than an enterprise-wide concern.
• the financial impact of a breach can be significant, especially if class actions are filed;
• regulatory changes are making compliance harder and increasingly expensive; and
• the Internet of Things is bringing new threats.
Separately, a recent survey by the National Association of Corporate Directors found that boards must significantly improve their understanding of cybersecurity risks.
To contact the reporter on this story: Yin Wilczek in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan Tuck at email@example.com
The report is available at http://www.pwc.com/us/en/press-releases/2015/cybersecurity-takes-center-stage.jhtml.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)