A Modern Cyber-Responsible CFO
A Chief Financial Officer (CFO) is the senior executive in charge of a company’s financial operations. A traditional CFO will typically act as a financial controller, which is more detail-oriented, and even if they are not from a financial background, they manage just the numbers and focus on transactions. A more modern CFO will be very forward-thinking. They manage risks and the future of the business.
While the Chief Executive Officer (CEO) sets the direction, culture, and budget for the company, the CFO is the agent of change, supporting that direction, implementing the company culture, and preparing the budget for the CEO.
Enterprise Risk Management (ERM) is a strategy across an enterprise, designed to identify potential events that may affect the company’s finances, operations, and objectives and keep risk within the parameters of the company’s risk appetite. The CEO’s commitment and that of every management team member, including the CFO, are critical to the success of ERM adoption and execution.
The executive team’s contributions, particularly in risk management, are required to meet the organization’s strategic goals. Nowadays, this requires considering cyber risk and integrating it into ERM.
The CFO’s job description is straightforward: cash flow management, financial planning, and financial reporting. Furthermore, their responsibilities include determining the firm’s financial capability and taking remedial actions to effectively and efficiently manage the firm’s risk. Each company has its own set of financial modules, and ERM is implemented using these modules. ERM can be an important tool for the CFO in helping them understand the potential impact of business risks on the business’s financial standing. This means that if cyber threats pose a risk to the business, then the CFO needs to understand what this means and how it can impact the organization’s financial position.
CFOs have a big say in implementing enterprise risk management, which should include cyber risk; they control the implementation of the ERM strategy. The adoption of ERM requires financial and operational resources and a thorough assessment of the likelihood of success.
This chapter discusses the main priorities for a CEO to consider when talking about the CFO’s financial strategy and involvement in ERM. In this chapter, we’re going to cover the following topics:
- Why the CFO should care about cybersecurity
- The CFO’s understanding of cybersecurity
- The aspects of cybersecurity the CFO should consider
- Defining the CFO’s role in building cyber resilience
- Communicating with the CFO about cyber risks
- Questions to ask your CFO
The following section provides further details on specific areas where the CFO remains an indispensable stakeholder in cyber risk management.
