Cyberattacks and their Impact on Shareholders and Board Members
Cyberattacks have become increasingly common in today’s world, with a wide variety of implications for anyone connected to a single business and its financial well-being. Cyberattacks can have serious results for businesses, with many incurring financial losses and negative impacts on their reputation. Perhaps the most heavily felt effect of cyberattacks is on a company’s shareholders and board members.
In today’s article, we’ll take a closer look at how cyberattacks can affect shareholders and board members, as well as examining methods that can be put in place to protect a company from such incidents.
What Exactly is a Cyberattack?
Before examining how cyberattacks can affect shareholders, it is important to understand what exactly a cyberattack is. A cyberattack is any illegal access to, or disabling of, a computer, network or information system. This is generally carried out by a malicious actor, often with the intention of stealing or manipulating sensitive data or carrying out other criminal activities.
Common Types of Cyberattacks
Cyberattacks are becoming increasingly common, with a variety of different techniques in utilization by malicious actors. Some of the most common types of cyberattacks include:
Phishing – A type of attack which tries to obtain sensitive data or computer accounts by posing as a legitimate company or individual.
Malware – Malicious software which is installed on a computer or network in order to gain access to confidential information or carry out malicious activities.
Denial of Service Attacks – This type of attack attempts to take down a website or server by bombarding it with requests or other forms of traffic, resulting in the website or server not functioning correctly.
SQL Injection – A technique where malicious code is injected into a vulnerable database in order to manipulate or steal data stored within.
Impact of Cyberattacks on Shareholders and Board Members
Now that we’ve taken a look at some of the more common types of cyberattacks that can occur, we can examine how these can impact shareholders and board members of affected companies.
- Financial Losses
The most obvious impact a cyberattack can have on shareholders and board members of a company is financial losses. Depending on the type of attack and the extent of damage, the financial losses could be anything from the initial cost of recovering from the attack to long-term damage to the company’s ability to generate revenue.
- Loss of Reputation
Shareholders and board members often have a vested interest in a company’s reputation and standing in the community. A cyberattack can have an enormous impact on a company’s reputation, leading to loss of existing customers and difficulty in recruiting new customers.
- Legal Actions
When a company falls victim to a cyberattack, it is likely that shareholders and board members will be the target of legal action from those affected by the attack. This can include actions for financial compensation for those who have experienced financial losses or class action lawsuits from shareholders and customers against the company.
- Communication Problems
When a company is the victim of a cyberattack, communication channels can be disrupted. This can lead to difficulties in terms of keeping shareholders and board members informed of company news, which in turn can lead to confusion and mistrust.
- Loss of Confidence
Finally, cyberattacks can lead to a loss of confidence in the company’s ability to protect its data and its systems. This can have a serious impact on shareholders and board members, who may be less likely to invest in the company or give it their full support.
Ways to Protect Your Company From Cyberattacks
Now that we’ve looked at some of the ways a cyberattack can affect shareholders and board members, it is important to identify ways of protecting your company from such attacks.
- Implement Strong Cyber Security Measures
The first step to protect your company from cyberattacks is to implement strong cyber security measures. Investing in and deploying a comprehensive cyber security strategy is the best way to ensure that networks and data are kept secure from malicious actors.
- Educate Staff on Cyber Security
It is also important that staff are educated and trained on cyber security related topics, such as identifying suspicious activity and understanding strategies for mitigating the risk of a cyberattack.
- Establish Data Cross-Checking Procedures
Establishing data cross-checking procedures is another method of ensuring the safety of a company’s networks and data. This can involve verifying the integrity of any incoming data or files and can help to prevent a malicious actor from accessing or manipulating the data.
It is clear that a cyberattack can have serious implications for a company’s shareholders and board members, in terms of both financial losses and reputational damage. However, by following the advice outlined in this article, it is possible to minimize the risks of a cyberattack and minimize the damage caused by any attack that does occur. By investing in strong cyber security measures, educating staff about cyber security and establishing data cross-checking procedures, it is possible to reduce the risks associated with cyberattacks and ensure the safety of your company and its shareholders and board members.
