Robert P. Silvers is a respected expert on Internet of Things security and effective corporate planning and response to cybersecurity incidents. Silvers is a partner at Paul Hastings and previously served as the Obama administration’s assistant secretary for cyber policy at the U.S. Department of Homeland Security. Silvers will speak at NACD’s 2017 Global Board Leaders’ Summit in October and NACD’s Technology Symposium in July.
Robert P. Silvers
Cybersecurity breaches pose a growing threat to any organization. As we’ve seen in recent years, and indeed in recent weeks, the most sophisticated companies and even governments aren’t immune from cyberattack. Ransomware has become a global menace, and payment data and customers’ personal information are routinely swiped and sold on the “dark web” in bulk. Next-generation Internet of Things devices are wowing consumers, but they are also targets, as Internet connectivity becomes standard-issue in more and more product lines.
How do directors prepare for this landscape? Everyone now acknowledges the importance of cybersecurity, but it is daunting to begin to think about implementing a cybersecurity plan because it’s technical, fast-moving, and has no “silver-bullet” solutions. Most boards now consult regularly with the organization’s information security team, but the discussions can be frustrating because it’s hard to gauge readiness and where the organization really stands in comparison to its peers. Sometimes directors confide in me, quietly and on the sidelines, that their real cybersecurity strategy is one of hope and prayer.
There are steps directors can take now to prepare for incidents so that when they occur the company’s response is well oiled. With the right resources and preparation, boards can safely navigate these difficult and unforeseen situations. Three key strategies can assist directors as they provide oversight for cybersecurity risks:
Building relationships with law enforcement officials
Having incident response plans in place (and practicing them)
Staying educated on cybersecurity trends
1. Building Relationships With Law Enforcement Officials
It’s no secret that relationships are central to success. Building the right relationships now, before your worst-case scenario happens, will help manage the situation. The Federal Bureau of Investigation is generally the lead federal investigative agency when it comes to cybercrime, and the United States Secret Service also plays an important role in the financial services and payment systems sectors.
Boards should ensure company management educates law enforcement officials from these agencies about the company’s business and potential risks. In turn, the company should ask law enforcement to keep it apprised of emergent threats in real time. There should also be designated points of contact on each side to allow for ongoing communications and make it clear whom to contact during an incident. This is critical to ensuring that the company has allies already in place in the event that a cyberattack occurs.
2. Having—and Practicing—Incident Response Plans
Directors should ask to see copies of the company’s written cyberbreach response plan. This document is essential. A good incident response plan addresses the many parallel efforts that will need to take place during a cyberattack, including:
a. Technical investigation and remediation;
b. Public relations messaging;
c. Managing customer concern and fallout;
d. Managing human resources issues, particularly if employee data has been stolen or if the perpetrator of the attack is a rogue employee;
e. Coordination with law enforcement; and
f. Coordination with regulators and preparedness for the civil litigation that increasingly follows cyberattacks.
An incident response plan is only valuable if it is updated, if all the relevant divisions within a company are familiar with it, and if these divisions have “buy in” to the process. If the plan is old or a key division doesn’t feel bound by it, the plan isn’t going to work. Directors should insist the plan be updated regularly and that the company’s divisions exercise the plan through simulated cyber incidents, often called “table-top exercises.” Indeed, table-top exercises for the board itself can be an excellent way to familiarize directors with the company’s incident response plan and its cyber posture more generally.
3. Staying educated on cyber security trends
As your board is building relationships with law enforcement officials and preparing an incident response plan, directors should also be educating themselves on cyber risk. Cybersecurity becomes more approachable as you invest the time to learn—and it’s a fascinating subject that directors enjoy thinking about. Do you know what a breach will look like for your company? What protocols do you have in place in case something happens?
According to the 2016–2017 NACD Public Company Governance Survey, 89 percent of public company directors said cybersecurity is discussed regularly during board meetings. Since a majority of directors in the room agree that cybersecurity is worth discussing, directors should collectively and individually prioritize learning the ins and outs of cyber risks.
One easy way to stay up to date on the latest is to ask the company’s information technology security team for periodic reports of the most significant security events that the company has encountered. This will give directors a feel for the rhythm of threats the company faces day in and day out.
Another option is for directors to take a professional course and get certified. The NACD Cyber-Risk Oversight Program is a great example of a course designed to help directors enhance their cybersecurity literacy and strengthen the board’s role in providing oversight for cyber preparedness. Consider these options to keep yourself as educated and informed as possible.
The more you can prepare individually, the better off you will be when you have to provide oversight for a cybersecurity breach at your company.
If I were sitting on a board, this attack would prompt me to ask questions about the following three areas:
End of Life (EOL) software;
EOL Software. EOL software is software that is no longer supported by the company that developed it in the first place, meaning that it is not updated or patched to protect against emerging threats. WannaCry took advantage of versions of the Microsoft Windows operating system that were beyond EOL and had well-known security vulnerabilities.
Typically, a company runs EOL software because they have a critical application that requires customized software that cannot run on a current operating system. This situation might force you to maintain an EOL version of Windows, for example, to run the software. In the instance of WannaCry, Windows XP and 8 in particular were targeted. Boards should be asking what risks are we taking by allowing management to continue running EOL software. Are there other options? Could we contract for the development of a new solution? If not, what measures have we taken to mitigate risks presented by relying on EOL software?
Other times companies run EOL software because they do not want to pay for the new software or they expect a level of unacceptable operational friction to occur during the transition from the old version to the new. Particularly in a large, complex environment the cross-platform dependencies can be difficult to understand and predict. Again, it is a risk assessment. What is the risk of running the outdated software, particularly when it supports a critical business function? If the solution is perceived as unaffordable, how does the cost of a new solution compare to the cost of a breach? Directors should also ask where are we running EOL software and why.
Patching. Software companies regularly release updates to their software called patches. The patches address performance issues, fix software bugs, add functionality, and eliminate security vulnerabilities. At any one time, even a mid-sized company could have a backlog of hundreds of patches that have not been applied. This backlog develops for a variety of reasons, but the most central issue is that information technology staff are concerned that applying the patch may “break” some process or software integration and impact the business. This is a valid concern.
In the case of WannaCry, Microsoft issued a patch in March that would eliminate the vulnerability that allowed the malware to spread. Two months later, hundreds of thousands of machines remained unpatched and were successfully compromised.
Directors should ask for a high-level description of the risk management framework applied to the patching process. Do we treat critical patches differently than we treat lower-grade patches? Have we identified the software that supports critical business processes and apply a different time standard to apply patches there? If a patch will close a critical security vulnerability, but may also disrupt a strategic business function, are the leaders at the appropriate level of the business planning to manage disruption while also securing the enterprise? Have we invested in solutions that expedite the patching process so that we can patch as efficiently as possible?
Disaster Recovery. It is considered a disaster when your company ceases to execute core business functions because of a cyberattack. In the case of WannaCry, many businesses, including essential medical facilities in the United Kingdom, could not function. WannaCry was a potent example of how a cyberattack, which is an abstract concept for many business leaders, can have devastating impact in the physical world.
One aspect of disaster recovery is how quickly a company can recover data that has been encrypted or destroyed. Directors should have a strategic view of the data backup and recovery process. Have we identified the critical data that must be backed up? Have we determined the period of time the backup needs to cover and how quickly we need to be able to switch to the backup? Have we tested ourselves to prove that we could successfully pivot to the backup? What business impact is likely to occur?
The hospitals impacted by WannaCry present another angle of the disaster recovery scenario. For these hospitals, the disaster wasn’t limited to the loss of data. Most medical devices in use today interface with a computer for command and control of that device. During this attack, those command and control computers were rendered inoperative when the ransomware encrypted the software that allows the control computer to issue commands to the connected device. In many cases there is no way to revert to “manual” control. This scenario is particularly troubling given the potential to cause bodily harm.
It is easy to see a similar attack in a manufacturing plant where a control unit could be disabled bringing an assembly line to a halt. And it is not hard to imagine a threat to life and limb in a scenario where we rely on computer control to maintain temperatures and pressures at a safe level in a nuclear power plant.
Directors should ask about the process to recover control of critical assets. Can we activate backup systems that were not connected to the network at the time of the attack? If we bring the backup system on line, how do we know it will not be infected by the same malware? Have the appropriate departments practiced recovery process scenarios? What was the level of business disruption? Does everyone in the company know his or her role in getting critical operations back up and running?
Directors provide oversight of the risk management process—they do note execute the process. Understanding how the company is managing risk around EOL software, patching, and disaster recovery sets the right tone at the top and ensures that the company is better prepared for the inevitable next round of attacks.
Major General (Retired) Brett Williams is a co-founder of IronNet Cybersecurity and the former Director of Operations at U.S. Cyber Command. He is an NACD Board Governance Fellow and faculty member with NACD’s Board Advisory Services where he conducts in-depth cyber-risk oversight seminars for member boards. Brett is also a noted keynote speaker on a variety of cyber related topics.
This special supplement to Jim DeLoach’s recent blog post provides several questions to empower effective conversations about the state of a company’s cyber-risk oversight practices.
I recently shared several business realities that boards should consider as they oversee cybersecurity risk. These realities point to the need for companies and their boards to ensure that cyber-risk management efforts are focused, targeted, cost-effective, and continuously improving. While these realities are important to bear in mind, the board must inform its understanding of the company’s cyber-risk capabilities by asking the right questions.
Following are suggested questions that directors may consider, in the context of the nature of the entity’s risks inherent in its operations.
As a board, are we sufficiently engaged in our oversight of cybersecurity? For example:
Do we include cybersecurity as a core organizational risk requiring appropriate updates in board meetings?
Do we have someone on the board, or someone advising the board, who is the point person this topic?
Are we satisfied that the company’s strategies for reducing the risk of security incidents to an acceptable level are proportionate and targeted?
Does the board receive key metrics or reporting that present the current state of the security program in an objective manner?
Is there a policy on securing board packets and other sensitive material communicated to directors? If not, is there potential exposure from sharing confidential information through directors’ personal and professional email accounts and free file-sharing services that are not covered by the company’s cybersecurity infrastructure?
Have we identified the most important business outcomes (both unanticipated successes of the digital initiative, as well as adverse events) involving critical data and information assets (the crown jewels)? With respect to those outcomes occurring:
Do we know whether and how they are being managed?
Does our security strategy differentiate them from general cybersecurity?
Do we assess our threat landscape and tolerance for these matters periodically?
Are we proactive in identifying and responding to new cyber threats?
Does the company have an incident response plan? If so:
Have key stakeholders supported the development of the plan appropriate to the organization’s scale, culture, applicable regulatory obligations and business objectives?
Have we thought about the impact specific cyber-events can have and whether management’s response plan is oriented properly and supported sufficiently?
Is the plan complemented by procedures providing instructions regarding actions to take in response to specific types of incidents? Do all the stakeholders for a planned response know their respective roles and responsibilities? Is it clear for which events the board should play a key role in overseeing the response efforts?
Are effective incident response processes in place to reduce the occurrence, proliferation, and impact of a security breach?
Are we proactively and periodically evaluating and testing the plan to determine its effectiveness? For example, does management have regular simulations to determine whether the detective capabilities in place will identify the latest attack techniques?
In the event of past significant breaches, have we made the required public disclosures and communicated the appropriate notifications to regulators and law enforcement in accordance with applicable laws and regulations?
The dialogue resulting from these questions stand to lead to improvements in cybersecurity, if any are needed. Be sure to check out my earlier blog for further discussion of this important topic.