EIGHT OUT OF TEN global institutional investors would not invest in a hacked business, a KPMG survey has revealed.
The Big Four firm’s research found that 79% of the 133 institutional investors with over $3trn (£2.02trn) under management taking part in the exercise would be discouraged from financially backing a business that has been subjected to a cyber attack.
Investors believe that under half the boards of the companies they invest in have the appropriate skills to manage cyber risk or manage innovation and risk in the digital worl
Such sentiment was mirrored in a recent KPMG survey of FTSE 350 businesses which found that 39% of boards and management agreed they were severely lacking in their understanding of this area.
Malcolm Marshall, global head KPMG’s cyber security practice, said: “Investors see data breaches as a threat to a company’s material value and feel discouraged in investing in a business that has had its sensitive information compromised.”
“Following a number of high profile breaches, we are seeing global investors waking up to the issue of cyber security. The ripple effect of this has seen investor appetite for cyber businesses increase, with the survey revealing that 86% of investors see it as a growth area.
Marshall suggests that boards need to take a number of steps to improve the situation such as understanding and approaching cyber security as a business risk issue, not just a problem for IT.
Directors should also understand the legal implications of cyber risks as they relate to their company’s specific circumstances, while boards should have sufficient cyber security expertise, with cyber risk management given regular and adequate time on the boardroom agenda.