Magazine article Information Management

General Counsel, Directors Rank Data Security Top Concern

Magazine article Information Management

General Counsel, Directors Rank Data Security Top Concern

Article excerpt

In August, Corporate Board Member magazine and FTI Consulting Inc. pubhshed the results of their annual 2012 Law and the Boardroom Study, "Legal Risks on the Radar." Earher this year the organizations surveyed 11,240 directors and 1,957 general counsels (GC) for pubhc U.S. comparties. Their responses provide insight on which current legal issues are of most concern for these two critical governance groups.

Data security topped both groups' lists this year. This is not surprising given that cybercrime has become a serious bottom-line expense for organizations today. Corporate Board Member recently reported that the median annualized cost of cybercrime for an organization is $5.9 milhon.

"Today, there is arguably no more insidious threat to a public company than that of cyber risk; it's invisible, ever-changing, and pervasive--making it very difficult for boards to manage," summarized the report writers.

In the 2012 study, 55% of GC and 48% of directors rated data security as a major concern. This is almost double from 2008 when 25% of directors and 23% of GC acknowledged it as an area of high concern.

Fewer than half (42%) of the directors reported their organizations have a formal, written crisis management plan for cyber attacks; 27% said their organizations don't have a plan, and 31% are not sure.

Despite the lack of a formal policy, more than three-quarters (77%) of directors and GCs beheve their organizations are prepared to detect a cyber breach. …

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