How Cyber Risks Can Impact M&A Due Diligence

Mergers and acquisitions were once only about ensuring that the deal would be lucrative for all involved. But today this topic takes on a whole new relevance due to cyber threats. A report from Freshfields Bruckhaus Deringer, an international law firm, says that 83 percent of those responding to the survey would abandon a merger if they felt there were significant cyber breaches possible from the acquisition.

Director Education

Experts confirm that over half of all American corporations actually do not analyze cyber threats during their due diligence. Though some research is done into this area, many directors believe this subject is not thoroughly researched before a merger takes place. This is a topic of grave concern to many CEO’s and CFO’s for several reasons. Recent cyber thefts have occurred where personal and credit card information was stolen from customers shopping at their favorite stores.

Everyone loses when a cyber theft takes place, but it has started to become more personal for corporate directors and boards. That’s because consumers have now determined that these losses could have been prevented if only the company had better protected their data. And they’re hiring personal injury attorneys to sue these large corporations. These types of lawsuits put the entire board of directors at risk as consumers seek to place blame for lost personal data.

New Cybersecurity Solutions

Director and officer liability insurance has become essential for board members and it can protect your personal assets during a lawsuit. But the solution to this growing problem is far more complex.  At Cybernance, we’ve put together a program that addresses cyber threats at every level. We understand the importance of communicating with all stakeholders in a common language. Please contact us to learn more.