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A CEO Blueprint: What to Do if Your Company Is Cyberattacked

Since the Target breach more than a year ago, we at Chief Executive have gone to great lengths to make it clear to CEOs that cybersecurity is now their responsibility. We’ve emphasized that they need to be fully up to speed on their company’s protective capabilities and emergency response plan, to ensure the systems are strong enough to keep hackers out and to ensure that they themselves can adequately answer all questions on the topic from board members, shareholders and the media, both during quiet times as well as after an attack. This article is a thorough blueprint that can help fulfill both those goals by fast-tracking CEOs’ cybersecurity learning process.

Picture this scenario: Hackers have penetrated your company’s cyber defenses and made off with thousands of your customers’ social security numbers, credit card numbers, or healthcare records. Or, perhaps a trusted, long-time employee has unexpectedly quit, and your information technology staff discovered that the employee used a thumb drive to download trade secrets, premerger documents, or patient records.

If your company finds itself confronted with such a scenario, there is much to do. Because you have prepared for this day, you activate your crisis response team. Select executives, IT staff and security personnel work alongside in-house lawyers, outside counsel, and HR staff to investigate, seal the breach, and, if news of the breach is public, manage the fallout. If consumer data was stolen, you prepare the appropriate data breach notifications, regulatory reporting, and media strategy. You communicate a single message, through your media relations staff, that minimizes the impact on the company’s reputation, stock price, and relationships with key business partners. If trade secrets were stolen but the news is not yet public, you assess the extent of the damage and then monitor your competitors.

“After a breach, communicate a single message through your media relations staff that minimizes the impact on the company’s reputation, stock price, and relationships with key business partners.”

Amid all this activity, it’s easy to forget that your company has been the victim of a crime. After all, someone broke into your computer systems, stole the company’s crown jewels, and likely did it for profit. The following checklist identifies considerations to keep in mind when deciding if, when, and how to approach law enforcement for help in catching the bad guys.

Are you required to notify law enforcement?
There is no single federal law establishing a uniform notification standard. But your company may be required to notify government officials depending on the nature of your business or the nature and size of the breach.

For example, defense contractors must generally report the loss or theft of classified or export-controlled materials to the federal government. Healthcare providers must also report the loss of patient medical records to the appropriate federal and state authorities. In such specialized instances, the government will almost always commence a criminal investigation to identify and pursue the perpetrators.

Meanwhile, nearly all 50 states have enacted consumer-notification statutes for loss of consumer data affecting their residents. Some states, such as New Jersey and New York, require notifying the state attorney general or other state law enforcement agencies about a breach. Of course, such notification may result in criminal investigators seeking evidence from your company.

It is therefore critical for you to understand the regulatory environment in which your company operates and the states in which your company has customers. After a breach, investigate immediately to determine the nature and size of the incident, as well as the location of potentially affected individuals and entities, and then assess with counsel the applicability of any notification provisions.

About John E. Clabby and Joseph W. Swanson