Cyber Risk Management in 2025: Countries Increasingly Demand Material Cyber Incident Reporting
As a component of these new and enhanced national cybersecurity policies, regulators will increasingly require that organizations disclose extreme or “material” cyber events. In the past, businesses preferred to keep these types of incidents under wraps, notifying only those they deemed to be the relevant parties, who, in some cases, were not even the customers. However, with this pattern becoming more frequent, governments decided to intervene.
For instance, the US SEC now demands that corporations publicly disclose if they have fallen victim to a “material” cyber incident, aiming to provide investors, stakeholders, and other related individuals with an in-depth understanding of the event, including the financial losses and operational damages incurred. The EU’s NIS 2 likewise demands that entities report any cyber attack that causes a “significant” impact, reinforcing this accountability.
Regulators believe that businesses have an obligation to share these types of incidents due to the resounding market effect they can potentially cause. Public awareness of such events ensures that stakeholders are better informed, stock options are priced fairly, and companies are held to a higher standard of transparency and risk management.
Business Insight: Quantifying Materiality for Streamlined Reporting
Determining whether a cyber event has caused a “material” or “significant” impact is a nuanced process that requires executives to evaluate the myriad of damages the organization has suffered in the wake of an event, not least of which includes financial expenses, outage times, and number of data records compromised.?
To streamline the decision-making process, business leaders should establish quantified thresholds that, if surpassed, most likely indicate that the event can be deemed material and should, therefore, be disclosed.
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Read the full list of 9 cyber risk management trends every business leader should be aware of in 2025 here: https://www.kovrr.com/blog-post/9-cyber-risk-management-trends-in-2025-every-business-should-know
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Strategic Cybersecurity Executive | Visionary Leader in Cyber Resilience, Risk Management, and Governance | Transforming Organizations Through Strategic Security Frameworks, Regulatory Compliance, and Innovation
3 个月Insightful
Strategic Cybersecurity Executive | Visionary Leader in Cyber Resilience, Risk Management, and Governance | Transforming Organizations Through Strategic Security Frameworks, Regulatory Compliance, and Innovation
3 个月The shift towards mandatory disclosure of extreme or “material” cyber events represents a significant evolution in cybersecurity governance. Historically, organizations could self-determine the scope of notification, often prioritizing internal and stakeholder concerns while leaving customers and the broader public uninformed. However, as cyber incidents have become more pervasive, impactful, and frequent, this approach has proven inadequate. Governments and regulators stepping in reflects a necessary change. Transparency and disclosure not only ensure accountability but also help drive improved resilience across industries. By mandating clear reporting, regulators aim to protect consumers, foster trust, and create a baseline for understanding emerging threats. For businesses, this policy shift means a stronger emphasis on proactive incident management and clear communication strategies to remain compliant. This marks the beginning of a new era, one where cyber resilience is as much about trust and transparency as it is about prevention and recovery.