www.digitaldirectors.network
The Value of Digital, Cybersecurity
And Systemic Risk Governance
Albert Einstein has famously said that if he had
an hour to solve a problem, he’d spend 55
minutes thinking about the problem and 5
minutes thinking about the solution. The truth of
his statement reflects the reality that in order to
solve a problem, you first have to understand it.
Over the last eight years, DDN has worked
exclusively to understand the role of the
boardroom in shaping and securing the digital
future and the importance of strengthening
directorship as a control in optimizing the
potential of the digital future. Together with our
corporate, executive and boardroom members
we know how to solve this problem and what’s
at stake when we do, and don’t.
Based upon a growing body of evidence, we
know that strengthening the boardroom works
to create and protect the vast amounts of
business value derived from complex digital
business systems. That value drives economic
output and growth, i.e., revenue and profitability
and many different corporate value propositions.
And strengthening corporate governance
strengthens the whole digital business system to
create a resilient system that delivers and protects
investor and stakeholder interests.
The debate is also over on these benefits, but
denial is not. Boardroom leadership drives
significant positive business impacts, the
evidence supports this. The lack of boardroom
leadership does the opposite and the proof makes
almost daily headlines.
Our mission at DDN and DOMINO is to scale,
distribute and continue to advance these
solutions. By strengthening the boardroom as
a control in the complex digital business system
we enable boardroom leaders and management
teams to stop being literal hostages to their digital
business systems. Whether being held captive by
ransomware, a malicious attack, or even human
error, our mission is to set them free so that they
can focus on navigating their companies safely and
securely into the digital future.
Empirical evidence and research from MIT shows
that effective digital and cybersecurity governance
creates significant positive business impacts.
These benefits include higher revenue growth,
profitability, return on assets, and market
capitalization. The business impacts their research
identified when boards have a critical mass of true
digital capabilities and expertise included:
Their conclusion is that boardroom leadership
delivered by corporate directors with digital
expertise drives material business results.
Research from Virginia Tech during the SEC’s
comment period for their proposed cybersecurity
disclosure rules also gathered evidence of the
positive impact to cybersecurity risk when there
is director cybersecurity expertise on the board,
and the negative impacts when it is lacking. These
impacts included:
•
38% higher revenue growth.
•
34% higher market capitalization growth.
•
34% higher return on assets.
•
17% higher profit margins.
•
Lack of director cybersecurity expertise
leads to superficial check-the-box oversight.
•
Boards without cybersecurity expertise
rely too heavily on the CISO which can
create a circular oversight environment
that lacks independence or even encourages
CISO’s to water-down problematic issues.
•
Director cybersecurity expertise can
strengthen the effectiveness of the CISO
with the full board and the C-suite.