Cybersecurity and Managing Reputational Risk for Mission-Driven Organizations
As mission-driven organizations rely more heavily on digital systems, the more cybersecurity intermingles with reputational risk. When your board isn’t prepared to manage a cyberattack, your nonprofit’s reputation can suffer in ways that can be hard to bounce back from.
Cyber risk, the potential for harm due to cyberattacks or data breaches, can lead to financial losses, data theft and operational instability. Reputation, of course, is how your stakeholders perceive your organization. While cyber risk and reputational risk are two different concepts, one can have a huge impact on the other.
In this article, we’ll delve into the following topics to help you understand the important connection between cybersecurity and managing reputational risk:
- The connection between cyber risk and nonprofit reputation
- The ripple effect of reputational risk
- Harmonizing cybersecurity and reputational risk management
- Involvement of stakeholders
- Constant vigilance and proactivity for cybersecurity
Reputation and Cyber Risk
News of a data breach or cyberattack causes stakeholders to start questioning a lot of things – the quality of the leadership, the organization’s commitment to cybersecurity, operational procedures and more. Here is how cyber risk can harm your nonprofit’s reputation.
The Connection Between Cybersecurity Breaches and Reputational Damage
First, let’s understand the connection between cybersecurity breaches and reputational damage. As word spreads of a cyberattack or data breach, the public starts to lose trust in the nonprofit’s ability to protect information, especially when an attack involves the leak of personal information.
A data breach can temporarily divert the board and leadership’s attention which can disrupt programs and activities while they deal with it. Furthermore, individuals who were harmed or potentially harmed may be subject to blackmail, defamation or shame. Victims may also be concerned about financial losses, and the board will have to determine how or if to compensate them.
On the flip side, cybercriminals are often on the lookout for nonprofits that have strong cybersecurity as they may believe the nonprofit has valuable data. It’s considered a big win for criminals if they can take down a nonprofit with a stellar reputation.
Overall, boards need to be aware of the prevalence of cyber risk and the fact that the nonprofit may be a target for hackers.
The Ripple Effect of Reputational Risk
A cyberattack often creates a ripple effect that changes stakeholders’ perception of a nonprofit.
Here are some of the issues that ripple effect can cause:
- Stakeholders become leery of their investment in the organization
- Fundraising becomes less effective
- Potential partners hesitate to establish a public partnership
- Volunteer participation becomes lackluster
- Financial support begins to dwindle
While the ripple effect can prove to be devastating to a nonprofit, a proactive stance toward building resiliency can help protect your nonprofit’s reputation.
Building a “Reputational Shield”
With so much at stake, your board needs to build a resilient “reputational shield” to protect the organization from the fallout of a cyberattack. Here are five strategies to mitigate and manage reputational risks:
- Build stakeholder engagement to garner support during challenging times
- Uphold ethical practices to prevent or reduce reputational harm during a cyberattack
- Plan a crisis response plan to address the situation promptly and effectively
- Be open and transparent to stakeholders if an attack or data breach occurs
- Monitor your nonprofit’s reputation using online and offline channels and respond to negativity quickly
To be effective, these strategies must be ongoing and reviewed periodically, and a board management solution has the tools to ensure your reputational shield remains strong.
Harmonizing Cybersecurity and Reputational Risk Management
The synergy between cybersecurity and reputational risk management works to enhance the overall perception of a nonprofit.
The goal of cybersecurity is to identify a nonprofit’s cyber risks so the nonprofit can determine which risks they can manage and which they need to address. Nonprofit boards can then decide how to manage risk in one of the following three ways:
- Avoid it – Refraining from activities that could cause a risk
- Retain it – Accepting it with the realization that a loss could occur
- Share it – Distributing it among more than one party (cyber liability insurance, for example)
A robust cybersecurity framework demonstrates to stakeholders that your nonprofit is committed to safeguarding sensitive data and personal information. Overall, boards need to consider that cybersecurity efforts and reputational risk management go hand-in-hand.
Involvement of Stakeholders
A collective approach to cybersecurity and reputation risk management is necessary to ensure strong cybersecurity.
It’s crucial to promote cybersecurity awareness among the board, staff and volunteers through regular cybersecurity training that covers the following topics:
- Phishing
- Password hygiene and security
- Social engineering
- Web security
- Mobile security
- Remote work security
Boards must also make it a point to understand the cybersecurity risks associated with vendors and partners. The National Cyber Security Centre has published valuable guidance on this topic.
A board management solution with strong cybersecurity ensures that your board documents, communications, and board materials are secure.
Be Proactive and Vigilant About Cybersecurity
There are a variety of ways your nonprofit can be proactive and vigilant about cybersecurity. We’re giving you eight ideas to get you started:
- Employee training – Set up a schedule to educate and train staff about cybersecurity best practices and start fostering a culture of cybersecurity
- Patch management – Assign someone to update software patches and fix vulnerabilities.
- Accent control – Implement strict user access controls according to the principle of least privilege so users only access the information they need (BoardEffect’s system features granular permissions)
- Network security – Use firewalls, intrusion detection systems, and encryption to protect data on networks and in transit
- Vulnerability assessment – Scan and assess systems for vulnerabilities regularly
- Backup and recovery – Back up critical data regularly and test the restoration process
- Incident response plan – Establish and rehearse an incident response plan you can deploy in the event of a cyberattack
- Security audits – Conduct regular security audits and penetration testing to identify and address weaknesses
Remember to stay vigilant and diligently monitor and update your cybersecurity practices.
Make Cybersecurity and Reputational Risk a High Priority
Your board has worked tirelessly to build your nonprofit’s reputation, and a cybersecurity incident can literally result in years taken to rebuild it. Proactive measures to mitigate cyber risk and preserve your nonprofit’s reputation are critical to ensure lasting impact, trust, and success.
Board management software by BoardEffect presents a secure way for boards, executives, and their risk management committees to collaborate and communicate about how to manage reputational risk by achieving cyber resilience.
See how BoardEffect, a Diligent Brand, can help strengthen your charity or nonprofit’s cyber resilience. Request a demo today.
