Adam Golodner Weighs in on Importance of Companies and Directors Paying Attention to Cybersecurity in Agenda
Agenda, a Financial Times publication, reports that the SEC has taken a special interest in ensuring that boards of directors address current cybersecurity threats and take steps to manage cyber risks now and in the future. The SEC has issued guidelines for disclosing material cyber events and notified SEC-regulated entities that it will be conducting examinations of over 50 broker/dealers for cyber. Earlier this month at a speech at the New York Stock Exchange on “Boards of Directors, Corporate Governance and Cyber-Risks: Sharpening the Focus,” SEC Commissioner Aguilar focused on the duties of members of boards of directors to understand and manage cyber risks (including litigation) and opportunities, as well as the impact these have on their companies and consumers.
According to Kaye Scholer Partner Adam Golodner, Leader of the firm’s Global Cybersecurity and Privacy Group, directors should take advantage of the SEC’s focus on cybersecurity to become familiar with it now, rather than later. It should be used “as a helpful reminder to get ahead of the curve and feel comfortable about dealing with cybersecurity threats,” he said.
“It’s time to build the lines of communication into the plan now, and exercise those plans so that directors will find themselves in a situation where everyone knows their responsibilities for oversight and communication, even in non-trivial events,” he added.
Golodner also said that like any other high-priority issue, directors should consider how cybersecurity could affect emerging business plans when taking into account various risk factors.
“We’re going to see increasing scrutiny on cyber issues across the board from regulators, but there also is an increasing business rationale for being very proactive on cyber issues and making it a core part of a company’s strategy,” he said. “The sooner companies and boards take a progressive stance on that, the sooner they can claim a core competitive advantage.”