The board's role in managing cyber risk

Friday, 01 September 2023


    Cyber attack and data breaches are growing threats, and the lack of top risk management talent is compounding the issue. 

    Boards need to understand cyber risk in the same manner they read financial statements and possess the talent to help quantify and qualify the organisation’s ability to address risks, according to Mimecast vice-president APAC Nick Lennon.

    “In the past 12 months, we’ve seen polarising examples where organisations were prepared — and possibly weren’t prepared — in managing a risk incident,” he says. “If a board is mature in this area and has a clear understanding of how to interpret risk and skills in regard to holding its executive team accountable to the response to any risk or cyber risk incident, then the board is doing its job, ensuring that the impact to all stakeholders is minimised.”

    Cyber threat will be the greatest challenge to growth this year and also across the next three years, according to the Risk Management Institute of Australasia (RMIA) report 2023 Landscape of the Risk Management Profession in Australasia. There is also increasing concern about knowledge and skills gaps in the profession.

    “The most fundamental question a board should ask is, are we adequately equipping ourselves for success?” says RMIA CEO Simon Levy GAICD. “Our research has told us that 81 per cent of respondents continue using outdated and inadequate risk reporting methods.”

    Cluster muster

    Geographical mapping has revealed the multiple advantages delivered by concentrated digital technology clusters throughout Australia.

    Australia’s digital technology clusters have been mapped and analysed on a national scale for the first time as part of a new report by Australia’s national science agency, CSIRO, and the Tech Council of Australia.

    The report — The geography of Australia’s digital industries — explores how the geographical concentration of innovation, as in Silicon Valley in California, boosts growth and productivity. The report found there are 96 clusters spread around the country accounting for 63 per cent of tech jobs in Australia.

    CSIRO acting CEO Kirsten Rose GAICD notes that understanding the patterns is important as international research reveals considerable benefit. “The experience globally has shown
    that firms in clusters grow, employ and innovate at a faster rate,” she says. “We know comparatively
    little about this in Australia, but this report tells us very clearly that geography matters. Understanding that geography can help us catalyse growth.”

    Tech Council CEO Kate Pounder MAICD says the 36 regional specialist clusters prove that digital innovation can happen anywhere in Australia. “Giving a range of communities access to this opportunity is vital as this report highlights the benefits for communities of being in a cluster. Given that tech jobs are among the fastest-growing, best-paid and most flexible jobs in the country, it’s a great advantage for any community to have a cluster in their area.”

    Expediting diversity

    Chief Executive Women (CEW) president Susan Lloyd- Hurwitz says culturally and racially diverse women leaders face a double-glazed glass ceiling, experiencing barriers because of their gender and race. The CEW Unlocking Leadership: Conversations on Gender and Race in Corporate Australia report outlines five actions to maximise the potential of women leaders:

    • Lead a conversation about cultural and racial diversity
    • Role-model curiosity and engage in self-reflection
    • Gather data, set goals, measure progress and hold leaders to account
    • Actively invest in sponsorship
    • Build culturally safe workplaces and breakdown systemic barriers.

    Culture clash

    Culture has a tangible impact on company performance, specifically financials.

    The Aligning culture with the bottom line: Putting people first survey from global leadership advisory firm Heidrick & Struggles found Australian CEOs reported an 88 per cent improvement in diversity, equality and inclusion performance due to culture — the highest among all the markets surveyed.

    Globally, 71 per cent of CEOs highlighted culture as a top factor positively influencing financial performance — up from 26 per cent in 2021 — while 98 per cent of CEOs in Australia, Canada, the UK, Hong Kong and Singapore agree that culture has improved employee retention rates.

    This article first appeared under the headline 'Risky Business’ in the September 2023 issue of Company Director magazine.

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