Cyber risks have been a top concern of global leaders for a while now, with cyberattacks appearing four times as a top-five risk by likelihood in the past decade. This year, leaders ranked two technological risks in the top 10 by impact: cyberattacks in seventh place and critical information infrastructure breakdown in eighth place. To combat these global risks, organizations must improve their cyber resilience efforts.
In February 2019, the World Economic Forum (WEF) released a special report titled “Cyber Resilience in the Electricity Ecosystem: Principles and Guidance for Boards,” which supplements a prior report on cyber resilience issued in 2017. In light of the interconnectedness of organizations and ecosystems today, I’d argue that the report’s main principles can apply well beyond the electrical industry. Examples of other ecosystems that could be severely disrupted — or, worse, catastrophically impacted — by cyberattacks or cyber failures include the global banking sector, global stock exchanges, and the transportation sector and its supporting infrastructure.
We Need a Systemwide View of Resilience
Of course, it is easier to mentally conceive of the impacts of cyber risks on the electrical grid as they relate to our way of life; many of us have had the displeasure of living through a blackout, where the noise of our busy lives suddenly makes way to the deafening silence of a powered-down world. However, as organizations begin to understand and take stock of the interconnectedness of their supply chains and the intricate nature of their business partnerships, the cyber risk discussion must evolve from internally focused defenses and reactions into a larger systemwide view of resilience.
To help guide global stakeholders — government leaders, boards of directors, top leadership, and IT and security leaders — the WEF resilience report provides a number of principles that organizations should follow and governments should keep a close eye on. Failure to act now, while we still can — and can do so at a reasonable cost — could lead to systemic shocks and engender cascading failures on a scale never seen before.
While the idea of “stress tests” has been used many times in the financial sector, its applicability to our connected world is long overdue. But it all starts at the top, with a strong governance principle.
The Governance of Cyber Resilience
Over the past decade, there has been a shift in the boardroom to pay increasing attention to the issues of cybersecurity and cyber risks. Instead of leaving those issues for IT to deal with, board directors have rightfully become more engaged in overseeing management’s activities and, by extension, ensuring that the organization is as cyber resilient as it needs to be.
At the board level, resilience in the cyber realm isn’t about asking, “Are we doing something?” or, “What are we doing?” but rather, “How well are we doing?” and, “How do we know we would be able to recover from a cyber outage?” The WEF report provides several questions for boards to ask of top leadership and chief information security officers (CISOs), such as:
- How much operational technology (OT) do we have? How much crossover is there between OT, IT and physical security? Could an issue in one domain move into another?
- Have roles and responsibilities for each area — resilience for IT, OT and physical — been defined? How well do these areas collaborate or integrate with one another, as opposed to operating in silos?
- What processes and structures are in place to “ensure a coordinated cyber resilience strategy” across the organization?
For the CISO, this is an opportunity to be more of a strategic partner and adviser to top leadership and the board, to shed much-needed light on just how well the organization is prepared to detect, contain and recover from a cyber disruption. However, having the board’s support is key to helping the CISO break what are otherwise longstanding barriers and the “this is how we’ve always done it” attitude. With that support, the CISO can work to integrate cyber risk management into all business decisions.
Resilience by Design
One of the most striking differences between IT and OT is their very different design imperatives. Most of IT was designed with short component lifetimes (3–5 years), a preference for confidentiality (at least when compared to expectations for OT components), and expectations that delays, while inconvenient, are part of the IT ecosystem as components are replaced, upgraded or simply patched.
By contrast, OT components are designed to last 10 to sometimes 20 years, with high-availability requirements under near real-time conditions, meaning there’s never a good time to take OT systems down for maintenance or patching.
It is thus critical to design and deploy cyber resilient components for new IT and OT systems and closely monitor existing systems already in place. On this front, board directors are told to ask questions such as:
- How are cyber risks considered and accounted for at the onset of new projects and in current operations, across the business?
- How does management ensure that appropriate controls have been put in place, and how is the effectiveness of those controls evaluated and monitored? Just how cyber resilient are current systems?
- How does leadership communicate the importance of cyber resilience throughout the organization and enable cross-functional information flows?
The good news is that boards and management can empower their CISO and the rest of the security function to take the lead on providing answers to these questions. The bad news is that looking at the organization as an island isn’t the right approach; we must consider the whole ecosystem.
Reciprocal Impacts Between Organizations and Ecosystems
Boards are also coming to grips with the reality that compliance isn’t sufficient to safeguard their organization’s operations and profits given the complex, highly interconnected ecosystems they operate within. With this realization, boards are asking better questions and engaging in enterprise risk conversations to drive important topics, such as the availability and distribution of security resources and budgets, and a more holistic approach to enterprise risk management that goes beyond compliance to also include risk appetite and alignment with organizational goals and strategy.
Beyond the internal focus, boards are also asking top leadership to look outward, to ensure that management is aware and understands how changes and disruptions in the ecosystem can impact the organization and, conversely, how disruptions in the organization’s own IT and OT could impact the wider ecosystem.
This focus goes beyond the routine of third-party vendor assessments and the management of those particular risks to include a broader view of the risks posed to the organization by the ecosystem and vice versa: highest external risks and their impacts, reputational risks, external dependencies and procurement process agility, testing and integration of new systems, and preparedness against cascading failures originating outside the organization.
Collaborate and Test Across Your Ecosystem
With the realization that “we’re all in this together,” boards want to learn how effectively their organizations are collaborating with the rest of the ecosystem in planning and testing cyber resilience. What mechanisms are in place to share best practices and alerts (e.g., the various Information Sharing and Analysis Centers in the U.S.)? What government resources or bodies are available to interface with? How does management ensure that it is aware of relevant information that may be shared with the organization via those channels? How is information received through such channels used for strategic decisions by management?
A clear example of this commitment to collaboration across the ecosystem for the betterment of all is the Charter of Trust, which leading global companies such as Siemens, Airbus, Allianz, Daimler and IBM have signed on to as a way “to strengthen trust in the security of the digital economy.” The 10 principles outlined in the Charter of Trust are fully aligned with, and reinforce the commitment of, the management of each of those companies to creating a better, safer digital ecosystem for us all.
While collaboration and sharing of threat information and best practices is key, the entire ecosystem would be left in a highly fragile state if peers and competitors didn’t also collaborate to prepare and test their cyber resilience plans. Once again, the CISO is well-placed to be part of those discussions and exercises, to help evaluate just how well the ecosystem can respond to and recover from a cyber incident.
Top leadership and board directors are coming to grips with the need for their organizations — together with their peers and competitors in the ecosystem — to be more resilient to cyber attacks and disruptions. CISOs, who now have a seat at the table, must play a leading role in this effort.
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