Headquarters of the U.S. Securities and Exchange Commission in Washington, D.C. Photo: Diego M. Radzinschi/ALM
Virtually all of the world’s commercial data and information has become remotely accessible from almost anywhere, creating an explosion of corporate productivity and efficiency, as well as a never-ending stream of hackers hoping to take criminal advantage of it. Recent COVID-19 lockdowns and mass migration to remote work have highlighted both the power and the continuing vulnerabilities of this evolution. To assist investors in understanding the evolving risks, the Securities and Exchange Commission (SEC) has shown a steadily increasing focus on cybersecurity disclosures in recent years, and that trend is almost certain to continue with new rule amendments expected in April of this year.
In a keynote speech on January 24, SEC Chair Gary Gensler said: “Cyber incidents, unfortunately, happen a lot. History and any study of human nature tells us they’re going to continue to happen … . Given this, and the evolving cybersecurity risk landscape, we at the SEC are working to improve the overall cybersecurity posture and the resiliency of the financial sector.” A key focus for Chair Gensler is the need to develop more uniform disclosures, observing that “companies and investors alike would benefit if [cyber risk disclosures] were presented in a consistent, comparable, and decision-useful manner.”
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