Boardroom Governance with Evan Epstein

Bob Zukis, CEO of the Digital Directors Network: On Cybersecurity in the Boardroom.

Dec 19, 2022

An interview with Bob Zukis, CEO of Digital Directors Network, delving into cybersecurity governance in the boardroom. Topics include digital value for corporate boards, leading cyber governance practices, criteria for a digitally savvy director, and the placement of cybersecurity in board committees. Insights on the impact of globalization, cybersecurity threats, and the importance of cybersecurity expertise in corporate governance.

53:55

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Episode guests

Bob Zukis

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Quick takeaways

Addressing skill gap in cybersecurity on boards is crucial for effective governance.

Understanding systemic risks in digital systems is key to cybersecurity governance success.

Boardrooms must prioritize cybersecurity expertise to navigate modern digital risks.

Deep dives

Digital Directors Network: Origin and Mission

The Digital Directors Network was founded with a focus on addressing the significant skill gap in cybersecurity and digital governance on corporate boards. This initiative stemmed from a realization that expertise in cybersecurity and other tech-related issues was lacking in boardrooms. By recruiting over a thousand leading CIOs, CISOs, and corporate directors, the network aims to transform corporate board oversight of digital and cybersecurity risks, impacting one board, leader, and director at a time.

The Evolution of Boardroom Governance

01:23

The Impact of IT and Cybersecurity Awareness at Leadership Level

01:31

The Effectiveness of Quotas in Corporate Governance

01:40

Introduction

2min

Global Career Journey and Impacts on Globalization

4min

Digital Directors Network and Cybersecurity Governance

23min

Evolving Cybersecurity Threats and Systemic Vulnerabilities

2min

Enhancing Cybersecurity Expertise in Corporate Governance

16min

Exploring the Influence of Mentors and Global Experiences on Career Development

2min

Personal Reflections and Anecdotes: Embracing the Unknown and Discovery

2min

Reflections on Admiration Amidst Global Issues and Cybersecurity Insights

2min

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.

You can follow Bob on social media at:

Email: bob@digitaldirectors.network

Website: www.digitaldirectors.network

LinkedIn: https://www.linkedin.com/in/bobzukis/

You can follow Evan on social media at:

Twitter: @evanepstein

LinkedIn: https://www.linkedin.com/in/epsteinevan/

Substack: https://evanepstein.substack.com/

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/