- Personal liability is becoming a notable trend in cybersecurity compliance, with new EU regulations allowing penalties for executives’ negligence in cybersecurity oversight.
- NIS 2 and DORA, both EU regulations, introduce provisions for personal fines or bans on managerial roles in cases of extreme negligence, setting a precedent for compliance enforcement.
- To avoid personal liability, businesses must prioritize readiness for compliance mandates like NIS 2 and DORA, though many still need to prepare or misrepresent their efforts.
Cybersecurity compliance is evolving, with recent EU regulations introducing the potential for personal liability among business leaders. Traditionally, compliance penalties targeted organizations, but under the Network and Information Security Directive (NIS 2) and the Digital Operational Resilience Act (DORA), regulators can hold CIOs, CISOs, and other executives personally accountable for cybersecurity failures resulting from gross negligence. Though not yet widely enforced, these provisions signify a shift in compliance enforcement, raising stakes for IT and business leaders.
NIS 2, which aims to strengthen cybersecurity across industries, began full enforcement in October 2024, while DORA, focused on the finance sector, will take effect in January 2025. These regulations enable penalties such as fines up to €1 million or bans from managerial roles for executives found negligent. However, they target leadership rather than individual contributors, meaning managers could face penalties even when errors stem from employees under their supervision.
Many organizations remain underprepared for these regulations. IDC research reveals significant gaps in readiness, with fewer than 20% of businesses in some EU countries actively preparing for NIS 2 as of late 2023. Some organizations have even exaggerated claims of compliance efforts, highlighting the need for genuine and thorough readiness. To mitigate risks, companies must prioritize robust cybersecurity practices, ensure alignment with regulatory mandates, and address organizational gaps in compliance preparedness.
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