Bob Zukis, CEO of the Digital Directors Network: On Cybersecurity in the Boardroom.
Boardroom Governance with Evan Epstein
Digital Directors Network and Cybersecurity Governance
Exploring the speaker's journey post-retirement, the Digital Directors Network, and the importance of cybersecurity in the boardroom. Discussing the necessity of digital expertise on boards and advocating for specialized tech and cyber committees for effective governance. Highlighting the significance of cyber expertise disclosure and the impact of skilled directors on improving business outcomes.
0:00 -- Intro.
1:38 -- Start of interview.
2:06 -- Bob's "origin story". His professional career with PwC and management consulting globally.
4:31 -- On globalization, China and current geopolitical tensions.
6:14 -- His career post PwC. He led a venture-backed SaaS company and became an Adjunct Professor at USC.
7:28 -- About the Digital Directors Network, focused on digital and cybersecurity in the boardroom. "It's an educational/training, advocacy and advisory platform."
11:40 -- The value of digital and cybersecurity in the boardroom.
13:35 -- The background and scope of his book "Digital and Cybersecurity Governance Around the World."
15:38 -- The digital value business case for corporate boards.
17:43 -- Some of the digital and cyber governance leading practices. "It's usually around three areas: 1) Who's on the board, 2) how is the board structured around these issues, and 3) how does the board understand risk."
18:32 -- How to define a digitally savvy director. His "director framework" (8 domains). Reference to MIT research that found that "companies with digitally savvy boards had at least 34% higher performance on market cap growth, revenue growth, and ROA." Critical mass of three digitally savvy directors on one board.
21:42 -- Where to place cybersecurity in board committees. His recommendation: a separate technology and cybersecurity committee (cites examples of GM, WalMart, FedEx, Hasbro). He questions its placement in audit committees.
24:17 -- His thoughts on quotas for boards (on cybersecurity expertise). "Quota is such a dirty word [in governance circles] but they work and force the issue." "Gary Gensler was a senior advisor to Senator Paul Sarbanes, so the Statement on Proposal for Mandatory Cybersecurity Disclosures comes directly from his SOX days (he knows it works, it's a comply or explain provision)."
27:05 -- On international vs US boardroom cybersecurity practices. Skills, structure, scope.
30:06 -- On some of the techniques employed by hackers to infiltrate corporate systems.
32:16 -- On state and government level vs private corporate cybersecurity practices and collaboration.
33:59 -- Directors' oversight duties on cybersecurity and cyber insurance. "Our estimate is that only 9-10% of the economic exposure to cyber risk has been accepted or transferred to the cyber insurance risk industry [the company is on the hook for ~90% of the financial impact of this threat]." Individual liability of directors for cyber breaches (standard is high in the US). Del. Court Dismisses Cybersecurity-Related Oversight Claim Against SolarWinds Board.
38:19 -- Cybersecurity experts in the boardroom: "In US boards: 10-14%, it's inching up but it should be 100%" "For $315k per year [avg comp of S&P500 director] any corporate board can materially improve a critical control point in their cybersecurity system by putting a cyber expert on the board. It's a no-brainer, a slam dunk."
40:43 -- The "unfair" bias against CIOs and CISOs in the boardroom (as one-trick ponies).
43:49 -- "Digital and cybersecurity is part of the G in ESG, and we have not made nearly as much traction as some of the E and S folks have, so we still have some work to do."
45:05 -- "If you're a corporate director you should understand the skills, structure and scope of risk oversight that you have to address to govern these [digital and cybersecurity] issues."
45:57 - The books that have greatly influenced his life:
- The History of Pi, by Petr Beckman (1970)
- The Nature of Technology, by W. Brian Author (2010)
47:45 - His mentors, and what he learned from them: his teams and clients.
49:02 - His favorite city (and why): Hong Kong.
50:20 - Quotes he thinks of often or live his life by: Robert's Frost The Road Not Taken.
50:55 - An unusual habit or an absurd thing that she loves: "I'm a workout maniac."
51:50 - The living person he most admires: Volodymyr Zelensky.
Bob Zukis is the Founder and CEO of the Digital Directors Network and an Adjunct Professor at the USC Marshall School of Business where he teaches strategy, structured problem solving, global business issues and corporate governance.
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You can follow Bob on social media at:
Email: bob@digitaldirectors.network
Website: www.digitaldirectors.network
LinkedIn: https://www.linkedin.com/in/bobzukis/
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You can follow Evan on social media at:
Twitter: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License
You can follow Evan on social media at:
X: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
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To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License
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