Despite Heightened Cyber-Risks, Few Security Leaders Report to CEO

Despite mounting concerns over data breaches and the growing sophistication of the threat landscape, top management at most organizations still don't appear to view cybersecurity as a business-critical function.

A survey of 1,426 security professionals recently conducted by the Ponemon Institute for LogRhythm found just 7% of organizations represented in the survey had security leaders reporting directly to the CEO. The remaining 93% have their security leaders reporting to other executives, including the chief information officer (24%), director or manager of IT (19%), chief technology officer (12%), vice president of IT (11%), or chief revenue officer (9%).

Far from being close to the CEO, the survey shows the average security leader is, in fact, three levels removed from the chief executive, making it challenging for them to clearly articulate enterprise security risks to top leadership. Most security leaders don't have a direct relationship with the CEO and the board, even though they have complete ownership or significant influence over their organizations' cybersecurity budgets. Respondents to the LogRhythm/Ponemon survey reported an annual security budget of $38 million, or roughly 24% of their organization's average IT budget of $159 million.

"Cybersecurity leaders have assumed more accountability and risk but struggle to achieve the desired security posture because they are not as influential as other members of their peer group," says Mark Logan, CEO of LogRhythm.

Going into the survey, LogRhythm expected to find many CEOs were still failing to recognize the importance of the cybersecurity function, Logan says. Even so, the fact that only 7% of security leaders report directly to the CEO was surprising, he says.

"That is an extremely low percentage considering cybersecurity is a critical business function," he says.

The issue of top management not giving the cybersecurity function and CISOs/CSOs enough attention has been long-standing. Security experts have long noted how the C-suite and boards of directors have often tended to view cybersecurity as a cost center and tactical firefighting operation rather than as a strategic business enabler. Security leaders themselves have often taken the blame for being overly technical and unable to articulate security challenges to the C-suite in terms of business risk and risk management.

The LogRhythm/Ponemon report shows the current reporting structure for CISOs and CSOs at most organizations is doing little to alleviate the situation. Just 37% of respondents, for instance, said they or someone within the security function reports to the board on cybersecurity matters. Of this number, 41% said they report to the board only when a security incident happens, and 13% said they report to the board just once a year. Only 30% of respondents said someone from the security function reports to the board on a quarterly basis. While workplace disruptions tied to the COVID-19 pandemic have significantly elevated security risks at most organizations, 63% of respondents said they had not briefed the board on these risks.

"The level of board awareness of the state of security within an organization must therefore be remarkably low," Logan says. "Not only does leadership not have a clear picture of the program and risks, but risk is also amplified due to this lack of executive visibility when it comes to strategic planning and budgeting."

The Filtering Impact
One reason why security leaders are still not getting enough attention in the C-suite is a continued lack of understanding about their role among top leadership. Logan describes the situation as resulting from a sort of "filtering" that occurs when security issues are reported to the CEO through multiple layers.

"For example, let’s say a CSO reports to a CIO, who then reports to the CFO," he says. "The CFO would be the one to ultimately deliver the message to the CEO."

This sort of a reporting structure can create bottlenecks and result in less budgetary and organizational support because the security message can get diluted through the drawn-out channels of communication, he says.

Significantly, though, most CISOs and other security leaders don't have direct access to the CEO — and therefore are limited in their ability to affect significant change yet are likely to take the fall if something goes wrong. When respondents were asked who should be held accountable for a cyberattack, 42% pointed to the security leader compared with 15% who felt the buck stops with the CEO.

The report shows that leadership attitudes toward the cybersecurity function and reporting structures have remained largely static, though risks have increased sharply. Fifty-five percent of the respondents said their organizations had experienced a data breach in the past two years. The shift to a remote workforce caused by the pandemic has exacerbated the issues and left most organizations feeling more vulnerable to attack than before.

"To be successful in gaining visibility and influence, security leaders must first understand their audience — specifically what they care about and what their goals are," Logan notes.

To dispel notions about security being a cost center, security leaders need to make the conversation about cost efficiencies and impact to the organization's bottom line.

"To be effective, the security leader must have a deep understanding of the organization’s culture, customers, models, drivers, and overarching goals," he says.