CISO – Strategic Executive or Executive Scapegoat

For decades, organizations have relegated cybersecurity to the IT department. A technical function managed in the background while CIOs and CFOs shaped corporate strategy. This made sense when cybersecurity meant deploying firewalls and scheduling antivirus updates.

It makes no sense today and is an awful business strategy.

Cyber risk is now business risk. Every breach threatens revenue, reputation, and regulatory standing. Yet most CISOs still operate several levels below the boardroom, excluded from the strategic decisions that determine their organization's risk profile. This isn't just an organizational quirk. It's a structural vulnerability that's costing companies millions and increasingly, costing executives their careers.

The Hidden Cost of Exclusion

When your CISO operates outside the executive suite, the consequences ripple through every strategic decision:

1. Preventable Breaches Become Inevitable

Threat actors don't only exploit weak firewalls. They exploit the gaps between business strategy and security reality. Consider Target's 2013 breach. The attack succeeded through a third-party HVAC vendor's compromised credentials, then moved laterally through Target's network to compromise point-of-sale systems. The breach cost $202 million in direct expenses after insurance. Both the CEO and CIO resigned. A Senate investigation later revealed that Target's FireEye security software had detected and alerted on the malware, but the alerts went unaddressed because security teams lacked the authority and escalation paths to force immediate action on threats detected by their tools.

Or take Change Healthcare's 2024 ransomware attack. The breach disrupted prescription processing across America for weeks and cost UnitedHealth Group $872 million in the first quarter alone, with total 2024 costs projected between $1.35 billion and $1.6 billion. The attack succeeded through a single compromised account that lacked multi-factor authentication. A basic control that wasn't implemented on a critical remote access server. UnitedHealth CEO Andrew Witty testified to Congress that the decision not to implement MFA on that system represented a failure of basic cybersecurity practices. The breach ultimately exposed the personal health information of over 190 million Americans.

The breach isn't a failure of technology. It's a failure of integration.

2. Reactive Spending Replaces Strategic Investment

Without executive-level input, cybersecurity budgets become crisis management funds. Equifax spent $1.4 billion responding to their 2017 breach. The funds went toward incident response, legal settlements, regulatory fines, and mandatory security improvements. The vulnerability that enabled the breach was a known Apache Struts flaw for which a patch existed. The patch wasn't applied because security teams lacked executive authority to enforce change management across business-critical systems.

Companies consistently spend multiples more responding to breaches than they would have spent preventing them. This isn't just wasteful. It's a competitive disadvantage that compounds annually while your board wonders why security costs keep rising.

3. Strategic Decisions Carry Invisible Risk

Every major business initiative from cloud migration, AI deployment, to digital transformation carries cyber implications that alter the entire risk equation. When executives approve these initiatives without cyber leadership at the table, they're making decisions with incomplete risk information or worse. Incorrect information due to the lack of experience of the individual providing the information.

SolarWinds is the definitive case study. The company's Orion platform update process lacked adequate security oversight because cybersecurity wasn't integrated into product development strategy. The result: nation-state actors compromised approximately 18,000 customers who downloaded the malicious updates, including multiple U.S. government agencies and Fortune 500 companies.

The SEC charged both SolarWinds and its Chief Information Security Officer Timothy Brown personally with fraud and internal control failures, alleging they knew of specific cybersecurity deficiencies but failed to disclose them to investors. While a federal judge later dismissed most of the SEC's claims, the case proceeded on allegations that the company made materially false statements about its security controls on its public website.

The personal liability risk is real. When cyber leadership lacks executive authority, executives cannot credibly claim they understood and managed cyber risk.

The Advantage Leaders Recognize

Forward-thinking organizations aren't elevating their CISOs out of fear. They're doing it because you cannot make sound strategic decisions about investments, acquisitions, or market expansion without understanding the true cyber risk embedded in each choice.

Market Differentiation Through Trust

Cybersecurity posture increasingly determines who wins enterprise contracts. When customers and partners evaluate vendors, they're asking: "Can we trust them with our data?" Organizations with executive-level cyber leadership can answer that question credibly. They hold certifications that unlock regulated markets. They pass vendor security assessments that competitors fail. They can demonstrate board-level governance of cybersecurity risk in a way that organizations with buried security functions simply cannot.

This isn't theoretical. Major enterprises now routinely require evidence of cybersecurity governance as part of vendor due diligence. Organizations that cannot demonstrate executive-level security leadership are increasingly disqualified from consideration.

Investment Clarity That Boards Understand

A CISO at the executive table translates security spending into business language: revenue protection, operational resilience, market access, and competitive positioning. According to IBM's 2024 Cost of a Data Breach Report, the average cost of a data breach reached $4.88 million globally, with significant variation by industry. Healthcare organizations faced the highest costs at $9.77 million per breach, while financial services organizations averaged $6.08 million. Organizations with extensive use of AI and automation in their security operations saved an average of $2.2 million per breach compared to those without such technologies.

When CISOs have executive authority, security investments can be framed in terms boards understand: avoided losses, protected revenue, and risk-adjusted returns. Cybersecurity isn't a cost center. It's risk management that enables growth.

Innovation Without Institutional Risk

When cybersecurity integrates with strategy from day one, transformation can accelerate rather than stall. This contradicts the prevailing myth that security slows innovation. Organizations that build security requirements into architecture from inception avoid the costly remediation cycles that delay projects when security is bolted on after development.

Security leaders with executive access become innovation partners rather than bottlenecks, because they're solving challenges and identifying risk mitigations before they escalate into crises that require board intervention.

Executive Protection in an Age of Personal Liability

The regulatory landscape has fundamentally shifted from corporate liability to personal accountability.The SEC charged SolarWinds and its CISO personally with securities fraud related to cybersecurity disclosures. While many charges were later dismissed, the case marked the first time the SEC charged a CISO individually in connection with alleged cybersecurity violations. The SEC also settled with four other companies. Unisys, Avaya, Check Point Software, and Mimecast alleging they made misleading disclosures about their exposure in the SolarWinds breach. Unisys paid a $4 million penalty.

These enforcement actions signal a new era of personal accountability. Directors and officers can no longer claim ignorance of cyber risk when they've structured their organizations to ensure cybersecurity leadership has no access to strategic decision-making forums.Organizations that elevate their CISO demonstrate governance maturity. It won't prevent every breach, but it will determine whether your executives can defend their governance decisions when regulators and plaintiffs come asking questions.

Why This Moment Demands Action

The threat landscape has fundamentally changed. Cybercrime has industrialized, with ransomware groups operating as businesses with customer service operations. Nation-states target private companies for intellectual property and operational disruption. AI amplifies both attack sophistication and organizational vulnerability. Defenders must get security right every time; attackers only need to succeed once.

The competitive gap is widening. Organizations that place their CISO beside their CFO and CIO are building the resilient enterprises of the next decade. Those that don't will explain their decision to regulators, shareholders, and whoever replaces their executive team.

What Executive-Level Actually Means

Before you claim your CISO is already "strategic," understand what executive-level authority requires:

• Reports directly to the CEO or board not through the CTO, CIO, or COO

• Participates in all strategic decisions M&A due diligence, product launches, vendor selections, market expansion

• Attends all board meetings not just quarterly cybersecurity updates to the person who does not understand or zero interest in the update.

• Budget authority commensurate with risk responsibility direct control over security investments, not request-based funding.

• Compensation structure matching C-suite peers equity, bonus structure, and base salary aligned with strategic executives

• Authority to escalate and halt initiatives when cyber risk exceeds risk tolerance, with direct escalation to CEO or board
  

If your CISO doesn't have these authorities, they're not at the executive table. They're a well-compensated advisor whose recommendations can be and regularly are overruled by executives who do not fully understand the implications.

The Cost of Inaction

The numbers are stark:

According to IBM's 2024 Cost of a Data Breach Report:

• Healthcare organizations: $9.77 million average breach cost

• Financial services: $6.08 million average breach cost

• Global average: $4.88 million per breach

• Organizations with severe security staffing shortages: $1.76 million higher breach costs

• Organizations extensively using AI and automation in security: $2.2 million lower breach costs

• Breaches involving stolen credentials: Took an average of 292 days to identify and contain
  

The United States leads all countries with an average breach cost of $9.36 million. More than half of organizations pass increased breach costs to customers through higher prices.

These aren't hypothetical scenarios. These are the documented costs that organizations are paying right now for breaches that often stem from the same fundamental problem: cybersecurity leadership that lacked the authority and access to prevent them.

Three Questions for CEOs and Boards

If your senior cyber leader isn't at the executive table, confront these questions directly:

1. Who represents cyber risk when we make strategic decisions?

If the answer is "no one" or "someone who reports to someone who reports to us," you're making strategic decisions without understanding their cyber implications. More importantly, you cannot defend that structure to the SEC, your legal counsel, or plaintiffs' attorneys after a breach. The SolarWinds case established that "we didn't know" is no longer viable when you deliberately structured reporting to ensure you wouldn't know.

2. Can you personally explain to regulators why cybersecurity leadership lacked executive authority?

The SEC has demonstrated willingness to charge executives personally for cybersecurity governance failures. Can you explain why your CISO couldn't access the board? Can you explain why cyber risk wasn't represented in strategic decisions that introduced vulnerabilities? If these explanations sound indefensible when spoken aloud, your structure is already indefensible.

3. What is our actual breach risk, and how would a breach impact our business?

Not the IT remediation cost. The full business impact: lost revenue, customer attrition, regulatory penalties, legal settlements, stock price impact, operational disruption, and reputation repair that takes years. If this picture isn't visceral to every executive, your risk assessment is fiction. Organizations that experienced actual breaches. Target, Equifax, Change Healthcare all discovered their breach costs vastly exceeded what executives had anticipated.

The Bottom Line

Your answers will determine whether your organization leads your market or becomes a case study in someone else's risk management presentation. More precisely, your answers will determine whether you're testifying about your company's cyber leadership structure to regulators, or explaining it to your board as a competitive advantage.

The organizations making this change now are defining what resilient enterprise leadership looks like. The ones explaining why they didn't will do so under considerably less favorable circumstances.

The question isn't whether to elevate your CISO to the executive level. That is the correct strategic decision. The question is whether you'll do it proactively as a competitive advantage, or reactively after explaining to regulators why you didn't.