How Can Organizations Navigate SEC’s Cyber Materiality Disclosures?

Cybersecurity leaders must navigate SEC regulations with a structured approach to identifying material cyber-risks, utilizing both quantitative and qualitative metrics. Frameworks based on loss thresholds, such as a 0.01% loss of annual company revenue, can provide a starting point for assessing materiality. Other operational loss benchmarks could include data records compromised or outage time. Engaging with key stakeholders to explore financial loss scenarios and align monetary thresholds with risk appetite is crucial, as well as factoring in qualitative impacts. Ultimately a standardized methodology, compliant with SEC regulations, fostering transparency and consistency, is important.