A Board Member’s Guide to Cybersecurity Oversight

Over the past two years, criminals with a taste for chaos have increased the frequency and severity of cyberattacks through social engineering and dark web transactions. As a board member, you have a critical role—and a fiduciary duty—in safeguarding your firm from those threats.  

It’s your job to be aware of the company’s cybersecurity risks, ensure there’s a plan in place to respond swiftly to a breach, and provide guidance to management and IT teams during and after the incident. To do that, you must be aware of and understand the latest threat landscape, practical risk management strategies, and complexities around cyber governance. 

Understanding the Cybersecurity Landscape 

Historically, attacks have been motivated by money. As hackers become more sophisticated, so do their tactics. Ransomware gangs have taken on a startup mentality, looking for ways to diversify. Some are even integrating Ransomware-as-a-Service (RaaS) into their business model and offering incentives to new recruits.  

Expanding attack surfaces related to hybrid work environments has contributed to increased phishing and spear phishing disasters and made it even easier to exploit inconsistent patch management and the vulnerabilities of publicly accessible systems. Spyware and zero-day software flaws have compromised both business and personal devices used for work-related tasks. 

Vendor vulnerability is also a serious consideration: third-party vendors account for about two-thirds of all data breaches. Companies in every industry are required to have vendor risk management programs, but only about half do. 

Risk Management and Assessment Techniques 

Obviously, as cyber threats continue to become more dramatic there’s an increased need for risk management, assessment, and mitigation, but it’s shortsighted to assume that responsibility is confined to the IT team.  

The tentacles of any threat invade and constrict all parts of a company. Without proper oversight and strategic direction from the board, the consequences can be devastating — financially, reputationally, and legally — and often lead to long-lasting repercussions throughout an organization.  

You may remember what happened in 2013 when Yahoo! was in negotiations with Verizon. Yahoo! suffered a massive cyberattack that compromised the personal data of billions of user accounts. Their board was scrutinized for their lack of leadership in cybersecurity governance and their valuation took a hit. Verizon lowered their offer by $350 million and required Yahoo! to share the legal liabilities created by the breach, highlighting the need for informed oversight, robust risk assessment, and effective incident response strategies. 

As a board member, it’s up to you to become familiar with the right frameworks and best practices for evaluating threats. IT assessments, penetration tests (pen tests), vulnerability scanning, and compliance assessments give you critical insights so you can better understand your firm’s cybersecurity posture and make informed decisions about how to strengthen it.   

Legal and Regulatory Requirements 

The Federal Trade Commission (FTC) Act and California Consumer Privacy Act (CCPA) set stringent standards for the protection of personal data, imposing hefty penalties for non-compliance. The General Data Protection Regulation (GDPR) shares those standards and penalties but extends your responsibility beyond national borders, emphasizing the global nature of cybersecurity governance.  

And in the financial sector, the Securities and Exchange Commission (SEC) mandates that companies disclose material cybersecurity risks and incidents to investors to ensure shareholders are fully informed about the potential impact of cyber threats on the company’s financial performance and reputation. 

Board members can’t get around the need to learn about, understand, and abide by these complex obligations because cyber governance is the keystone of modern business operations. Transparency and accountability are non-negotiable—they’re essential to the strategic decisions that protect your firm and drive it forward. 

Preventing and Responding to Cybersecurity Incidents 

Realistically, you’re going to run up against a cyber incident eventually. Without practical strategies in place to respond to these incidents, the board could be caught on its heels.  

The following checklist from my book Cyber Guardians: Empowering Board Members for Effective Cybersecurity provides the foundation for a well-defined incident response plan to contain a breach, investigate its cause, and mitigate any damage.  

1. Notify appropriate personnel. Ensure that the incident response team is immediately notified, and a plan of action is implemented. 
2. Assess the situation. Determine the extent of the breach and the potential impact on the organization’s assets, reputation, and stakeholders. 
3. Determine the cause. Identify the incident’s root cause and the vulnerability that was exploited. 
4. Contain the damage. Isolate the affected systems and limit further damage. 
5. Collect evidence. Preserve any evidence related to the incident and ensure that it is properly documented. 
6. Notify stakeholders. Inform all relevant stakeholders about the incident and provide regular updates on the status of the investigation. 
7. Involve legal and regulatory authorities. Consult with legal and regulatory authorities and external cybersecurity experts to ensure all requirements are met. 
8. Review and update policies and procedures. Review and update the firm’s cybersecurity policies and procedures to prevent future incidents. 
9. Communicate with the board. It’s not uncommon for only a few board members to focus on the incident, so it’s important to keep the entire board informed of the incident and provide regular updates on the investigation’s progress and steps to mitigate the impact. 
10. Conduct a post-incident review. Conduct a comprehensive review of the incident to identify areas for improvement and update policies and procedures as necessary.  

I can’t stress this enough: transparency and communication during and after a cyber incident are imperative. Timely and accurate disclosure to other board members, stakeholders, regulators, and the public is essential to minimize the impact of an incident and demonstrate your commitment to accountability.  
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Developing a Strong Cybersecurity Culture 

Cybersecurity culture is a mindset—a shared understanding that security is everyone’s responsibility. From the C-suite to entry-level employees, everyone has to be accountable, vigilant, and proactive in protecting digital assets. Fostering this kind of culture requires leadership from the boardroom because when you champion cybersecurity as a top priority, it sets the tone for the entire organization.  

Your success relies on education and awareness—what we call Brilliance in the Basics. Regular training sessions and resources on cybersecurity best practices empower employees to recognize and respond to potential threats effectively. Promoting open communication channels encourages staff to report suspicious activities promptly, further strengthening your defense against cyberattacks.  

Whether you’re evaluating new technologies, assessing risk management strategies, or reviewing third-party partnerships, cybersecurity must be a primary consideration. 

Choose Agio  

As a board member, you have an obligation to keep your organization safe from cyber threats. My book Cyber Guardians: Empowering Board Members for Effective Cybersecurity gives you the resources you need to champion robust cybersecurity strategies. Real-world case studies, actionable frameworks, and practical insights equip you to navigate the modern threat landscape, comply with regulations, and cultivate a culture of cybersecurity vigilance.  

At Agio, we understand the complexities of cybersecurity oversight at the board level and have the extensive institutional investment expertise to protect your firm’s most valuable assets. Our integrated approach provides the ultimate defense against emerging cyber threats so you can confidently meet governance obligations while fortifying your organization’s overall cybersecurity posture. 

Contact us today to explore how Agio can strengthen your cyber resilience and support your board’s cybersecurity oversight responsibilities.