By Jeff Paine, ResponSight

Following an increasing number of high-profile breaches and ongoing pressure from governments and regulatory bodies, cyber security is increasingly taking centre stage on most board agendas. Board members are becoming more aware that cyber incidents bear real consequences on the business and therefore business leaders should be across and plugged into the security strategy.

While great progress has been made regarding awareness of and investment in cyber security, especially in Australia, several recent surveys suggest there’s still a long way to go. CIOs and CEOs have wildly different opinions regarding the preparedness of their organisations, there are gaps in awareness/knowledge at the executive level, and thus there’s likely to be implications on how capital and resources are applied to close the gaps.

This presents several risks. One is a broader lack of knowledge around where enterprises keep sensitive data, and therefore where there could be greater risk potential. Another issue is what practical form risk mitigation should take: how scarce resources like capital and budgets should be applied.

According to KPMG’s latest Global CIO survey and CEO Outlook survey, Australian CEOs are more willing than their global counterparts to spend money on cyber security. 71 percent report investing in it, compared to only 53 percent globally. 80 percent of Australian CEOs rate cyber security as a top investment priority and place it amongst the top five risk areas for their business. While this is encouraging, only 45 percent feel their organisations are “fully prepared” for a cyberattack.

These findings largely mirror those of the ASX 100 Cyber Health Check, which was released in April. In that study, only 42 percent of respondents were “confident” that their organisations were “properly secured against cyberattacks.” More than three-quarters of ASX 100 respondents admitted that more needed to be done.

CIOs not feeling anywhere near as secure as CEOs

Although CEOs are on board when it comes to the importance of cyber security, CIOs are far less confident in their organisation’s actual readiness to defend against cyber criminals. In another study, only 21 percent of CIOs felt their organisations were “very well” prepared to respond to cyberattacks – this was down from 29 percent in 2014.

One in three CIOs reported that their organisation experienced a “major cyberattack” in the past 24 months, a 45 percent increase from 2013. The situation is worse at large organisations in Australia, with half of those CIOs reporting “recent attacks”. Utilities and government organisations were found to be most at risk, followed by the education, telecoms, and pharmaceuticals sectors.

So in the face of escalating threats and incidents, it is becoming increasingly clear that it’s no longer a matter of if, but more a matter of when an organisation will face a cyber incident. With this is mind, how can organisations further improve cyber security strategies? We see two key areas that need to be addressed.

1. Executive boards need better cyber security understanding

While 94 percent of Australian CEOs say that mitigating cyber risk is a core part of their role, only 11 percent of ASX 100 respondents reported a “clear understanding” of where their company’s key information and data assets are shared with third parties. In other words, most CEOs don’t know where all of their sensitive data is – and, therefore, where their risk lies. Even worse, only 29 percent of ASX 100 respondents reported that their boards included at least one member who was “well-versed in cyber security”.

Clearly, there is a need for the rest of the C-suite to become better educated regarding the reality of cyber security in their organisations. The best way to do this is to get CIOs more closely involved in the strategic operations of all facets of the business, not just IT. More than three-quarters of Australian CIOs reported having joined a board meeting in the past 12 months. However, the global figure is 92 percent, so Australia has more work to do in this area.

2. Funding is critical, but how it’s spent is even more important

“Working with restricted budgets” and “investment in cyber security” were top priorities for CIOs. However, Australian CIOs are also highly focused on implementing technologies that will help their organisations innovate and adapt. 93 percent reported maintaining or increasing investment in innovation, and 57 percent were investing in more agile technology platforms.

Innovation is particularly important in cyber security, a fast-paced, dynamic field where new vulnerabilities and threats emerge daily. While increasing funding on security is helpful, throwing money at the problem, in and of itself, won’t prevent attacks. Far more important than the amount of money spent is how it is spent.

Reactive cyber security – waiting until an attack occurs, then attempting to fix the damage – costs far more than preventing attacks in the first place. Organisations are far better served investing their money in proactive cyber security measures that will identify and patch vulnerabilities before hackers find them and, if a breach does happen, discover intrusions quickly, before hackers have had time to do widespread damage.

The research shows that most CEOs now realise the importance of enterprise cyber security, and they are expressing a willingness to loosen their purse strings for security initiatives. However, the gap between how CEOs view their enterprise cyber security posture and how their CIOs view it needs to be bridged.

Australia’s impending mandatory data breach notification law make it vital that organisations bridge this gap as soon as possible. This must will inevitably lead to a rethinking of board skills and drive more demand for senior cyber literacy within organisations. It is important that the entire C-suite be on the same page regarding their cybersecurity preparedness if they want to work together to build a more robust security strategy.

Survey after survey indicate that cyber security is now a board-level topic, yet so many C-suite executives are unable to fully understand how security incidents translate to quantifiable business risk. It is near impossible for organisations to agree on a security strategy for their companies if there is no common understanding of the risks involved.