It’s time for firms' cybersecurity credentials to take centre stage
Article by Bitglass CTO Anurag Kahol.
Over the past decade, corporate responsibility initiatives have made their way on to the websites of nearly every company in the Fortune 500. Organisations everywhere have made commitments to improve the environment, deliver transparency in their supply chains, and cultivate diverse and inclusive corporate cultures.
Can the same be said for the security of customer data protection policies? Let us delve into recent research to examine just how much of a priority these key areas are to the 2019 Fortune 500, which sectors fare best/worst, and what the impact can be over the longer term.
Under the microscope
Recently Bitglass conducted a major research study across all of the 2019 Fortune 500 to identify just how much emphasis the world’s leading companies are placing on information security and data protection. The research sought to answer two main questions:
1) Does the company’s website have a mission statement that clearly outlines the company’s cybersecurity efforts or its commitment to protecting customers’ privacy and data?
2) Is it clear if there are dedicated individuals responsible for cybersecurity initiatives or data protection?
To find the answers, their websites were scoured for keywords and phrases that demonstrated a priority over the security of personally identifiable information (PII) and customer privacy. A leading enterprise database was also used to identify whether each company had a chief information security officer (CISO) or a chief security officer (CSO). The results proved extremely interesting…
A total of 38% (190 companies) of the 2019 Fortune 500 do not currently have a CISO in place. Of these 190 companies, only 30 have another executive listed as responsible for cybersecurity strategy – such as a vice president of security.
This indicates that almost a third of all Fortune 500 companies do not have a clear, designated owner of cybersecurity within their senior hierarchy. Furthermore, of the remaining 310 companies (62%) that do have a CISO in place, only 13 have them listed on their company senior leadership pages.
The topic of privacy reflects a similar story, with 261 companies not having information on their websites about how they are protecting the data of customers and partners – beyond a legally required privacy notice. This suggests that over half (52%) of the world’s largest and most recognisable organisations are either unwilling or unable to share any details of their data protection strategies.
Major variation between industry sectors
As expected, there were wild variations between different sectors in terms of their internal information security leadership and the prominence of data protection information.
In terms of having a designated CISO or senior executive in charge of security, the best performing industries were transport (57%), aerospace (33%) and insurance (30%).
Aerospace also came out on top when it came to publicly available data protection information at 89%, denoting just how important security and data protection are to that industry. Perhaps unsurprisingly, the heavily regulated finance industry came second with 72%, while the technology industry came third with 66%.
On the flip side of the coin, not a single member of the hospitality industry within the Fortune 500 companies had a designated cybersecurity executive listed. This was also the case for more than 90% of the manufacturing and telecommunications industries. The hospitality industry fared just as badly when it came to publicly available information on data protection – coming joint last alongside construction and oil & gas with just 25% apiece.
Why does this matter?
In the past, many organisations – even those in the Fortune 500 – might have thought nothing of playing fast and loose with sensitive data, but today, such a prospect is absolutely unthinkable.
Lax security can not only lead to breaches and data theft, but it can also have serious repercussions ranging from industry fines to potentially fatal reputational damage. While it would be a leap too far to draw definitive conclusions from this study, some of its key points reflect poorly on many of the organisations involved. Could these findings be just the tip of the iceberg.
To provide some context around the potential dangers of lax security policies amongst large-scale enterprises, my company also researched the long-term fallout from the three largest breaches of publicly traded companies in each of the last three years.
These included LinkedIn (2016), Yahoo (2016), Verizon Enterprise (2016), Dun and Bradstreet (2017), Sonic (2017), Equifax (2017), Marriott (2018), Facebook (2018), and Chegg (2018).
The average number of individuals who had their personal information compromised by each breach was a staggering 257 million, with the breaches costing each company a mean of $347 million in legal fees, penalties, remediation costs, and other expenses.
Furthermore, these enterprises suffered a 7.5% decrease in stock price on average after being breached, leading to a mean market cap loss of $5.4 billion per company. In short, the damage suffered in every case was severe – to say the least.
Public trust requires public commitment
As the findings show, lax security (and its resulting breaches) can have significant long-term repercussions for organisations in any and every industry. If an organisation wants to maintain the trust of its various stakeholders and succeed as a business, publicly demonstrating its commitment to cybersecurity is becoming a critical requirement. In other words, protecting personal data and consumer privacy should be as much of a focus as any other area of corporate business.