Cybersecurity is no longer an optional or peripheral aspect of business operations; it’s an absolute necessity. The increasing frequency and sophistication of cyberattacks have highlighted the critical importance of robust cybersecurity measures. Along with these increases in frequency and sophistication, cyberattacks have also become incredibly expensive, with the average data breach costing millions. To stay ahead of cyber threats, organizations must adopt a proactive approach that starts at the top. In recent years, some organizations have looked to emphasize this responsibility by making it personal; by tying executive bonuses to cybersecurity performance.
Since 2017’s infamous data breach, credit bureau Equifax has been one of many to have partially tied executive bonuses to cyber goals. Since the breach, Equifax has taken significant steps in embedding cybersecurity goals at every level of the organization, incorporating executive compensation to corporate cybersecurity goals.
This may sound radical, but it really makes a lot of sense. Utilizing financial incentives to align corporate cybersecurity strategy with the executive team emphasizes the importance of risk management at the highest level. Here are some of the benefits of the strategy:
1. Aligning incentives with organizational priorities
Tying executive bonuses to cybersecurity performance sends a strong signal that cybersecurity is a strategic priority for the organization. When financial incentives are directly linked to cybersecurity outcomes, executives are more likely to champion security initiatives and allocate necessary resources to protect the organization’s digital assets.
2. Fostering Accountability with performance incentives
Accountability is a cornerstone of effective cybersecurity leadership. By holding executives accountable for cybersecurity outcomes, organizations create a culture of responsibility and diligence in managing cyber risks. This approach ensures that executives actively engage in cybersecurity decisions and demonstrate a commitment to safeguarding sensitive data.
3. Encouraging investment in cybersecurity
Effective cybersecurity often requires substantial investments in technology, training, and personnel. When executive bonuses are tied to cybersecurity performance, there is a natural incentive for leaders to allocate adequate resources to bolster security measures, ensuring that the organization remains resilient against evolving threats.
4. Demonstrating Commitment to Stakeholders
Customers, investors, and partners increasingly scrutinize an organization’s cybersecurity practices when making decisions. By linking executive compensation to cybersecurity performance, companies show stakeholders their dedication to safeguarding sensitive information and maintaining trust.
5. Creating a Culture of Continuous Improvement
Cybersecurity is an ever-evolving field. New threats and vulnerabilities emerge regularly, making it crucial for organizations to continually improve their defenses. Tying executive bonuses to cybersecurity performance encourages ongoing vigilance, risk assessment, and proactive adaptation to emerging threats.
Implementation and Metrics
Implementing a bonus structure tied to cybersecurity performance requires careful consideration. Organizations must define specific metrics and key performance indicators (KPIs) to assess executive performance accurately. These metrics must also provide valuable insight into performance rather than activity. Tracking the raw number of phishing emails blocked doesn’t tell us much about how well we’re doing, since that statistic relies almost entirely on a variable that can fluctuate significantly month-to-month; the total number of emails crossing your domain. This doesn’t tell us much about how well we’re doing, just what we’re doing.
A much better example might be mean time to respond (MTTR) to critical vulnerabilities once they’re identified. If you assign a maximum 5-day remediation time in policy, it becomes immediately clear that performance isn’t living up to corporate expectations when this cybersecurity performance indicator (CPI) exceeds the SLA. You can find out more about using the right metrics here.
These metrics should span all cybersecurity domains, including vulnerability management, inventory management, endpoint protection, identity and access management, network protection, incident response, user awareness training, and everything in between.
Tying executive bonuses to cybersecurity performance is a forward-thinking approach that can help organizations build a robust defense against cyber threats. By aligning incentives with cybersecurity goals, fostering accountability, and promoting investment in security measures, companies can demonstrate their commitment to safeguarding their digital assets and maintaining the trust of stakeholders. As cyber threats continue to evolve, organizations that prioritize strong cybersecurity leadership will be better equipped to protect themselves and thrive in the digital age.