Page 16 - Delaware Lawyer - Spring 2020

FEATURE
Gerard M. Stegmaier and Courtney E. Fisher1
Caveat
Analyzing cybersecurity challenges in corporate governance
I. INTRODUCTION
Thirty-three years ago, filmmaker Oliver Stone’s character Gordon Gekko quipped in the movie Wall Street that the most valuable commodity he knew of was information. While Wall Street has known this maxim for decades, its power and influence in corporate governance has taken on new importance in the 21st century.
14 DELAWARE LAWYER SPRING 2020
The organizations that rely on data have increasingly come to fear “data breaches,” “security incidents,” “ma- licious actors,” “ransomware” and a host of emerging threats that take up growing amounts of time in server rooms, board- rooms and, if recent trends continue, courtrooms. While few corporate offi- cers and directors have spent much time in server rooms, more and more time is being spent on cybersecurity and infor- mation governance in boardrooms in the hopes of protecting the interests of busi- nesses and avoiding costly and debilitat- ing litigation and liability.
In the first six months of 2019, data breaches compromised an estimated 4.1 billion records, 3.2 billion of which came
from just eight isolated breaches.2 For- mer FBI Director James Comey repeated in a 60 Minutes report the cybersecurity truism that there are only two kinds of organizations that have suffered an infor- mation compromise: “those that know about it and those that don’t.”3 The per- vasiveness of these risks has increased as the average costs of data breaches have risen 12 percent over the past five years, with a current average cost of $8.19 mil- lion in the United States and $3.92 mil- lion globally.4 These statistics should hardly come as a surprise. One cannot scan the headlines without reading about yet another computer attack, system shutdown or information compromise. The types of threats continue to evolve,
Director