August 31, 2022

Understanding SEC’s Proposal for Cyber Risk Management with Yaron Levi

by Cyber Ranch

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Show Notes

Yaron Levi, current CISO at Dolby and former CISO at Blue Cross Blue Shield in Kansas City, comes down to the Ranch to talk about the March 2022 proposal from Securities and Exchange Commission (SEC). Titled the Cybersecurity Risk Management Strategy: Governance and Incident Disclosure, this report has huge implications for cybersecurity in any publicly-traded company. Yaron walks through his research into this report and explains what this means in the future for real-world cyber practitioners.

 

Timecoded Guide:

[00:00] Introducing the Cybersecurity Risk Management Strategy: Governance and Incident Disclosure

[08:45] Explaining filing 8-Ks and 4-day turnaround disclosures

[14:03] Debating the obligations of a third party in an incident (i.e. supply chain)

[16:04] Comparing SEC’s cyber proposal to accounting’s GAAPs

[25:33] Involving the Board of Directors in cyber risk management 

 

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This is a proposed set of amendments and not a ruling. What does that mean, in terms of the real world?

Although the proposal was initially released in March 2022, Yaron explains these current rulings have been floating around the industry since 2018 and aren’t expected to become solidified until October 2022. In the meantime, many in the industry are curious about what these regulations mean for any and all cyber practitioners. Yaron understands the concerns many have, but also emphasizes that this is a maturity progression for the cyber industry.

“With everything happening around us over the last several years, we see security becoming a higher priority and a higher maturity in many organizations. By and large, organizations understand that security is not a luxury anymore, or something that doesn't apply to them.”

 

Is this proposal starting to put some real pressure on organizations to not just give lip service to cybersecurity?

Lip service to cyber is an unfortunate commonality among publicly traded companies that want to look safe without putting the effort or expertise into security. Thankfully, Yaron believes this SEC proposal will accomplish a great deal in encouraging companies to develop and mature their cybersecurity teams and protocols. As cyber management roles and board integration becomes a must, lip service will give way to real strategic change and a better understanding of the impacts and implications of security.

“I think, as we mature as an industry, and as we more and more understand the implications and the impacts of security on everything we do, strategy is something that will be very important for us to have. I would assume that every company will need to have one.”

 

Is this the right time for people to be excited about if there's gonna be a lot more CISO jobs open up, or if there's gonna be more board seats opening up for CISOs?

Yaron believes this SEC proposal will elevate processes and initiatives already in place to continue to elevate the expertise and opportunities within cyber. While many may see an increase in CISO roles and board opportunities, it's important to note that it is not just about roles and jobs, it’s about cyber’s maturity. Our community, not just in cybersecurity but throughout the world, has become dependent on technology and its vital to have individuals leading with maturity and competence to keep these technical processes secure. 

“Overall, I think these strategies are a really positive move, in terms of elevating the conversation, educating, providing more expertise, providing more knowledge, which ultimately, all of us will benefit from. All of us, and community and society in general.”

 

Do you have any closing thoughts or comments on this SEC proposal?

While Yaron breaks down individual elements of the Securities and Exchange Commission proposal with Allan, he understands that the most essential impact of the proposal is the potential it has to elevate the industry. Maturity and legitimacy is desperately needed in order to create cybersecurity’s own version of generally accepted practices. In the same way that accounting has GAAP, Yaron hopes this SEC proposal is a sign of the cyber industry growing up, coming into its own, and creating more secure processes in risk assessment. 

“These proposals are part of our maturity progression and are part of our growing up as an industry and as a practice. This is something that we have to evolve into. We can probably look at other industries and figure out what we can learn and leverage from them.”

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Links:

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