ASIC Calls for Prioritisation of Cybersecurity among Company Boards

Australian Securities and Investments Commission (ASIC) Chair Joe Longo delivered a recent address at the Australian Financial Review Cyber Summit warning directors to prioritise cyber security or face potential enforcement action.

Failure to prepare for and mitigate against cyber threats exposes a company to a foreseeable risk of harm, resulting in directors potentially breaching their duty of exercising reasonable care and diligence. ASIC has emphasised that companies must take an “active” approach when managing cyber threats, particularly threats created through engagement with third parties, and ASIC are prepared to take action against companies and directors who fail to or are inadequately prepared for cyber-attacks.

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The changing landscape of cyber security threats

Projections from Cybersecurity Ventures reveal a concerning trend—an expected 15 percent annual increase in damages resulting from cyber-crime, which is projected to reach an alarming US$10.5 trillion by 2025. In his address, Mr Longo stated that 62 percent of businesses have already experienced incidents impacting their security resilience.

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How to reduce cybersecurity threats

There are a number of steps companies can take to reduce the risk and impact of cyber-attacks, including:

• Third-party risk management: Companies should ensure that third-parties are vetted and monitored to ensure their cybersecurity policies are up to standard.
• Incident Response Plan: Companies should develop a comprehensive incident response plan to reduce the potential impact of cyber-attacks and test this regularly.
• Regular Cyber Security Audits: Companies should engage in routine cybersecurity audits to identify and address vulnerabilities.
• Employee Training: Companies should conduct regular cybersecurity awareness training for all employees, including phishing awareness and data handling courses, as well as implementing social media guidelines and emphasising the importance of keeping devices up to date.

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