EDITORIAL: CYBER SECURITY AND RESILIENCE - A BOARD ISSUE
March 2023 Edition - Written by Lesley Stephenson
In our first NED Conversations of 2023, a panel of expert speakers addressed the issue of cyber security and resilience.
Stephen Phipson, Chief Executive Officer of Make UK, the national organisation for manufacturing companies in the UK, set the scene.
We are currently going through the 4th Industrial Revolution – dramatic technological expansion and social change.
There are obvious benefits of modern digital technology but these come with threats from cyber security which are growing exponentially. In the manufacturing sector alone, 42 per cent of companies reported cyber attacks with an average financial loss of £250,000 as well as increasing incidences of IP theft.
One way around the well-reported current skills and labour shortage is to automate, but Stephen pointed out that many production engineers installing these systems have no knowledge around cyber, linking machines to the internet ‘like crazy – maintenance links to equipment providers, data links to management’ without understanding the need for cyber security, opening up back doors for potential hackers to compromise.
Stephen said that whilst the big companies are taking cyber security very seriously and have the resources to devote to protecting their businesses, there are an enormous number of SMEs who simply don’t have the same resources. However, realising that they can be compromised by issues in their supply chain so they are helping their suppliers to be cyber secure by providing frameworks, standards and training.
There is a real need for board directors to be aware of this as a serious issue and to be able to ask the right questions of their executive teams to ensure that they are not inadvertently opening the business up to cyber-attacks with the consequential financial, IP and reputational damage.
Stephen pointed out that digital technology offers a great opportunity for businesses to deal with some of the biggest challenges facing them, including productivity and the move to net zero, but in that process, boards need to make sure they are cyber secure.
If you didn't manage to make it to the NED Conversations event on 28th February, you can watch the recording below.
And please watch the second video from Latham & Watkins LLP about corporate financial crime enforcement here.