A survey of 276 board members by NYSE Governance Services and security firm Veracode found 60% of respondents expect an increase in shareholder lawsuits against companies due to cybersecurity issues, while 72% expect more cyber-related regulation in the near future.
The survey, titled Cybersecurity and Corporate Liability: The Board's View, revealed that 89% of respondents believe that businesses should be held liable for breaches if reasonable efforts are not made to secure customer data. Similarly, 90% agreed that third-party software providers should be held liable for vulnerabilities identified in their packaged software. Two-thirds of those surveyed said they have already started the process of inserting liability clauses into contracts with third-party providers, while others said plans are in place to start.
"The NYSE survey findings aren't surprising at all," said Craig A. Newman, a partner with Patterson Belknap Webb & Tyler and chair of the firm's privacy and data Security practice. "With major data breaches splashed across the headlines on almost a daily basis, the survey affirms that the overwhelming majority of organizations understand the risk of a cyber-attack and are taking steps to mitigate those risks."
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