The SEC’s New Cyber Accountability

The SEC’s new focus on cybersecurity disclosures is another curveball for CISOs. While transparency and accountability are essential, the recent enforcement actions raise a key question: are these rules helping organizations build better defenses, or are they just adding more pressure on already overwhelmed security leaders?

The SEC’s stance on cybersecurity is changing responsibilities, and maybe not in ways that prioritize actual security. It’s turning CISOs into financial strategists, legal consultants, and possibly corporate scapegoats … all while attackers are moving faster than ever. So what does this mean for CISOs?  Is it missing the “mark?”

The SEC’s New Reality: Holding CISOs to a Higher Standard

It’s no longer enough to stop breaches and manage vulnerabilities. Now, CISOs are expected to quantify risks in financial terms, ensure timely reporting of incidents, and align cyber risks with business outcomes. Admittedly, these are valid goals in theory, but in practice, the expectations border on unrealistic.

Take the SEC’s recent fines for cybersecurity omissions. Companies weren’t fined for lying, they were fined for not saying enough. During the SolarWinds breach, for example, organizations were penalized for failing to fully disclose the material impact of the attack. Statements like “a ransomware event occurred” weren’t sufficient because they didn’t explain the financial or operational fallout.

Fair enough right? The investors deserve clarity. But let’s ask ourselves: does this level of scrutiny help security teams defend against threats? Or is it just adding another red tape that shifts the focus away from what matters? Keeping organizations secure.

CISOs as Strategists, Not Scapegoats

The SEC’s new rules effectively push CISOs into a corporate strategist role, demanding skills I assume many of them weren’t hired to bring to the table. Suddenly, they’re expected to:

• Quantify the financial impact of cyber risks, from revenue loss to customer churn.
• Collaborate seamlessly with finance, legal, and investor relations to draft disclosures that satisfy compliance and shareholder expectations.
• Determine, in real-time, whether an ongoing attack is “material” enough to disclose within the SEC’s tight timelines.

This is a tall order, especially when most organizations struggle with basic cybersecurity hygiene. And let’s not forget the attackers who are definitely pausing their exploits so security leaders can file an 8-K.

The Disconnect Between Regulation and Reality

So the SEC’s rules force CISOs to prioritize compliance over actual security. Okay, it makes sense but seems more like it’s a game of optics, that they’re making sure investors see the right numbers and hear the right narratives while attackers continue exploiting gaps in our defenses.

For example, how does a CISO accurately report the financial impact of a breach when it’s still unfolding? Cyber incidents don’t come with clear price tags. Estimating the cost of downtime, reputational damage, and legal fallout is more art than science right?  Especially when attackers evolve faster than our ability to assess the situation.

And then there’s the challenge of aligning cybersecurity metrics with business outcomes.There are many people much smarter than me who can explain how this is done, but I’m just not seeing it. Boards want to know how a vulnerability impacts the bottom line, not just whether it exists. But how straightforward is, say, translating CVEs into dollars, especially when most tools operate in silos and fail to provide a unified view of risk?

Why the Rules Feel Misguided

The SEC wants to protect investors and hold organizations accountable for cybersecurity risks. But the way they’re going about it is … interesting. Their approach may brush aside the reality of modern cybersecurity: it’s an uphill battle, and even the best defenses aren’t foolproof. CISOs need room to focus on building resilient systems and adapting to evolving threats, not on perfecting their corporate storytelling skills.

‍What CISOs Need

If the goal is to improve cybersecurity outcomes, the focus needs to shift from reactive reporting to proactive defense. Here’s what might help CISOs succeed:

• Unified Visibility Across Tools: Most organizations rely on dozens of tools that don’t communicate with each other. Centralizing telemetry into a single pane of glass would provide the clarity needed to prioritize material risks.
• Real-Time Validation of Defenses: Attackers exploit gaps between what we think is protected and what is. Continuous validation ensures defenses align with evolving risks, reducing exposure and uncertainty.
• Practical Reporting Frameworks: CISOs need clear, actionable guidelines for aligning cyber risks with financial metrics instead of vague mandates. This includes tools to quantify impacts without requiring a PhD in economics.
• Time to Focus on Security: Let’s streamline the compliance burden so CISOs can spend less time drafting disclosures and more time doing what they do best which is keeping the organization safe.

A Call for Balance

The SEC’s focus on cybersecurity seems like a good call on the surface, but let’s hope it doesn’t become a distraction. Yes, we need transparency. Yes, we need accountability. But we also need to recognize that piling more responsibilities onto CISOs without providing the tools, resources, and frameworks to succeed is counterproductive. Their job is incredibly important and brutally tough as is.

If the SEC wants better cybersecurity outcomes, we wonder if they shouldn't meet security leaders halfway. You know, creating policies that support proactive defense, not just reactive disclosures. It also means helping CISOs get the necessary tools to succeed instead of possibly shouldering the liabilities. Until then, please keep doing what you’ve always done: fighting the good fight, even when the odds aren’t in your favor.

‍