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6/23/2017
11:00 AM
Raymond Pompon
Raymond Pompon
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Talking Cyber-Risk with Executives

Explaining risk can be difficult since CISOs and execs don't speak the same language. The key is to tailor your message for the audience.

On March 7, a bipartisan bill was introduced to the Senate called the Cybersecurity Disclosure Act of 2017. The bill’s purpose is to “promote transparency in the oversight of cybersecurity risks at publicly traded companies.” It adds Securities and Exchange Commission (SEC) requirements for public companies to disclose what cybersecurity expertise is present within the board of directors.

If no expertise is present, then the company must disclose in its SEC report “what other cybersecurity steps” are being done by the board nominating committee. Whether this bill succeeds in becoming law or not, it is a shot across the bow to executives.

With all this going on, it’s likely that boards and executive leadership are going to be buttonholing their CISOs into cyber-risk conversations. Just a few years ago, security professionals struggled for executive interest (let alone support), but now we are in the hot seat for answers. And what a hot seat it is! A recent survey from Osterman Research reveals that 66% of fired IT professionals were terminated for reasons of security or compliance failures. That’s why we need to make sure leadership understands the relevant security issues and how to help mitigate them.

Explaining risk can be difficult since CISOs and execs don’t speak the same language. You need to tailor your message for your audience. We’ve talked about using operational risk to frame the conversation, but there is value in a straight-forward approach as well.

To do this, you focus on the top cyber risks and provide just the information the board needs to know. A good place to start is the state of company culture regarding security. You can produce metrics on alignment to desired security policy with numbers around security awareness training attendance, patching completeness, audit findings, vulnerabilities, incident counts, and backup coverage. You can even make a nice radar chart to show the percentages and quickly make the deficiencies apparent.

Image Source: f5
Image Source: f5

Beyond the overall status of the program, you need to explain cyber-risk. Keep it simple and remember this important nuance: many ordinary people don’t realize that risk has two components: likelihood and impact. For example, some people tend to react to catastrophic impacts (What are we doing about Pottsylvanian hacker-spies?) that are rare while overlooking more likely risks like ransomware.

It shouldn’t be hard for you find likelihood data. In addition to industry statistics and open source threat intelligence, you can gather information internally. Sources can include data used to create the radar chart above as well as firewall, intrusion detection, web and mail system logs.

Impacts are easier to talk about, but you need to explain the real potential impacts to your business. Talk in terms of tangible and intangible losses that resonate with them, including:

Tangible costs:

  • Breach disclosure costs (PII record count x disclosure cost/record)
  • Customer SLA fines
  • Revenue loss during system downtime and recovery
  • Compliance and audit fines
  • Potential litigation and fines down the road
  • Incident response costs, including internal resources (OpEx), third party breach experts, required remediation controls, and effectiveness testing

Intangible costs:

  • Impact to brand (the business puts a value to this—usually found as an asset line item in your financial books)
  • Current and future customer perception and loss
  • Loss of business value in acquisition discussions
  • Competitive advantage loss
  • The board’s personal reputation and/or job

When presenting likelihood and impact, stick to the simplified High/Med/Low model. Everyone is aware that there are more layers, and most execs would understand a more complex model, but their time is limited. In matters where the risk is high, they will probably press for details.

Lastly, you should never present a problem without a solution. Make sure you have a solid mitigation plan (with proposed budget numbers) to resolve anything rated high risk. Executives will also want clear lines of responsibility. They’ll want to know who’s responsible for remediation, and who is paying. The chances are likely the board has already dealt with high risk non-cybersecurity scenarios before. If you’ve done your job well in explaining, you can sit back and watch them decide. As you are the cybersecurity expert, you should still be prepared to give them guidance or validation.

This might seem like a lot of work but for effective CISOs, it is routine. Risk assessments and reporting with the board should be happening annually, at least. As cyber-risk is better understood and managed, you might need only to present updates if something significant or material happened. This is the ideal position—not only does it mean everyone is sleeping it at night, it means the board trusts you.

Get the latest application threat intelligence from F5 Labs.

Raymond Pompon is a Principal Threat Researcher Evangelist with F5 labs. With over 20 years of experience in Internet security, he has worked closely with Federal law enforcement in cyber-crime investigations. He has recently written IT Security Risk Control Management: An ... View Full Bio
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Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
6/26/2017 | 7:02:24 PM
Reporting/communicating to whom?
@Raymond, bearing these interests and issues in mind, to whom do you think the CISO should report in a typical organization so as to best give his/her office an appropriate platform, to be best understood, and to be best supported? The CIO? The CFO? the CEO? the General Counsel/CLO? the Board? Someone else?
dunsany
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dunsany,
User Rank: Apprentice
6/27/2017 | 2:48:57 PM
Re: Reporting/communicating to whom?
Really good question. I'm actually got a blog post coming out on the F5Labs site on that very subject in the next few weeks. Sneak preview: The CISO should report outside of IT and as close to the top as they can to increase effective risk communication and maintain segregation of duties. And it seems the industry is heading in that direction.
Dr.T
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Dr.T,
User Rank: Ninja
6/27/2017 | 4:19:21 PM
Cyber-Risk
One of the ways taking the risk to the executives is to provide examples, we can mention the companies hacked and fines they were charged.  That would get their attention.

 
Dr.T
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Dr.T,
User Rank: Ninja
6/27/2017 | 4:20:49 PM
Re: Reporting/communicating to whom?
"to whom do you think the CISO should report"

this is a good question, I personally would like to work for a company where this does not matter.
Dr.T
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Dr.T,
User Rank: Ninja
6/27/2017 | 4:23:20 PM
Re: Reporting/communicating to whom?
"to whom do you think the CISO should report"

The CFO? I would just avoid CISO reporting CFO. Security should not be all about money.
Dr.T
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Dr.T,
User Rank: Ninja
6/27/2017 | 4:24:44 PM
Re: Reporting/communicating to whom?
"the CISO should report outside of IT"

This sounds like a good idea to avoid conflict of interest.
Dr.T
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Dr.T,
User Rank: Ninja
6/27/2017 | 4:26:35 PM
customers
"Current and future customer perception and loss"

I think this is where everything starts being problematic, no business without customers. 
dunsany
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dunsany,
User Rank: Apprentice
6/27/2017 | 5:23:36 PM
Re: Reporting/communicating to whom?
For most organizations, risk translates into monetary loss in one form or another.  It's not ideal in the human-world but in the corporate-world of lost revenues and liability lawsuits, money is a powerful measure for security loss avoidance.  The big problem is justifying potential dollar loss vs spending on controls to a CFO-type who sees only the sure loss of budget drain for new controls.  In my experience, I've had the most sucesses as head of security reporting to COO, who cares about operational effectiveness as well maintaining customer satisfication.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
6/28/2017 | 9:10:41 PM
Re: Reporting/communicating to whom?
@Raymond: Sounds about right to me. I've seen a variety of solutions to keep the CISO from reporting to the CIO. Where do you see the trends happening in terms of who this person to whom the CISO is? Is there one office that seems to be "winning" in this regard?
Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
6/28/2017 | 9:12:06 PM
Re: Reporting/communicating to whom?
@Dr. T: Security is about money, though -- or, at least, about economic value. Ditto for security's exact opposite -- accessibility.

It's all about risk management at the end of the day. Seems like something right up the CFO's alley. Of course, for the same reasons, also sounds like something right up the CLO or General Counsel's alley.
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