Month: September 2004

By passing the buck wholesale to the IT department companies are exposing a number of flaws across their organisation – from the top down – and even a tightening of legislation and increased emphasis on accountability and corporate governance has done little to interest the head-in-the-sand ‘higher ups’ that they should be getting involved and delegating tasks effectively.

According to independent research conducted by Coleman Parkes on behalf of LogicaCMG, 53 per cent of companies entrust the IT department with the sole enforcement of the information security policy. In addition, 71 per cent of companies rely on the IT department to implement information security policies and approaches – despite the fact that much of the planning should relate to HR and legal issues as much as to the technology in place.

Sal Viveros, SME director at security giant McAfee, believes one of the biggest obstacles to effectively managing security issues centrally from the IT department is the perception of other employees. Viveros said as a result those in the IT department are often seen as “the bad guys” and coupled with a perceived lack of seniority within the company this makes it difficult for them to dictate, manage and enforce policy.

While staff may sit up and take notice of a policy handed down by HR or a member of senior management, because the trail of accountability and its direct link to discipline procedures is evident, employees may feel less inclined to treat seriously the requests of the IT department.

In a separate study conducted by MORI, also on behalf of LogicaCMG, 83 per cent of investors said a security breach of any kind would impact that companies’ share price and 56 per cent they would sell their shares in the event of a breach.

The fact companies are seemingly doing little about getting on top of security is made all the more surprising by the fact companies are aware of such risks.

http://software.silicon.com/security/0,39024655,39123732,00.htm

Just over half of the FTSE 350 (53 per cent) believe the IT department should be solely responsible for enforcing information security management; 71 per cent think their IT department should be accountable for implementing and delivering a security policy. But investors think differently, with 87 per cent of those interviewed by LogicaCMG expecting a company board to actively review its security vulnerabilities.

This difference of opinion goes deeper, with around half of companies believing that there would be no impact on share price following a security breach.

But 83 per cent of investors indicated it would have a major impact and 68 per cent said it would influence their decision to buy or sell shares in the company.

Negative publicity and damage to their brand are what companies think would be the major effects of a security breach. Around 84 per cent of companies think a breach could adversely affect their brand, while 86 per cent highlighted negative publicity as their main concern.

Opinion is less divided on this issue, with 61 per cent of investors believing that a security breach would damage a company’s reputation.

The LogicaCMG survey also highlighted consumer concerns, with 24 per cent of respondents saying they would move their business to a competitor if a company were involved in a security breach; 23 per cent said they would never make a purchase from the offending firm again, and one in 10 said they would tell friends to steer clear.

“These research findings illustrate the wide gap between business leaders and investors views about the importance placed on information security governance,” said Dave Martin, UK principal security expert at LogicaCMG. “It’s not just abut damage to the brand, but also damage to the share value and market capitalisation and this realisation should prompt business leaders to take a more holistic approach to information security governance. “Unless a company can illustrate that it has sound governance of its information assets, it is exposing itself to potentially severe consequences from consumers, shareholders and regulators alike.”

http://www.theregister.co.uk/2004/09/06/investors_it_security_funk/