SOX risk assessment

Cybersecurity Looms Large at Debate on Geopolitical Risk

Shawn Seasongood, Managing Director Business Performance Improvement

The mission of St. John’s University Center for Excellence in Enterprise Risk Management is to “become a leading center that brings together students, academicians, executives, and board members for the purpose of developing and sharing knowledge, tools, and best practices in enterprise risk management.” The Center did just that when it hosted a panel discussion on geopolitical risk on October 15, 2015. Four noted experts of diverse backgrounds participated in the discussion, which focused on the growing instability in the world with traditional places of peace becoming more fragile and regional hegemony rising in the Middle East.

The panel included:

Panel leader: Fran Townsend, Executive Vice President for Worldwide Government, Legal and Business Affairs at MacAndrews and Forbes, and a member of Protiviti’s Advisory Board. Ms. Townsend served as Homeland Security Advisor and counterterrorism assistant to President George W. Bush and chaired the Homeland Security Council.

Fellow panelists: Guillermo Christensen, a senior associate with global law firm Baker Botts, who specializes in national security and international trade law; Roger Schwartz, a senior vice president in the political risk practice at Aon; and Zachary K. Goldman, executive director of the Center on Law and Security and adjunct professor of law at New York University School of Law.

The esteemed panel covered a wide variety of topics, ranging from the current political situations in China and Russia, to the continuing problems in Syria and the overarching threat of cyberattacks.

Following are some of the highlights of the discussion:

  • The panel agreed that the West, and the U.S. specifically, is so interconnected with China that the state of China’s economy is of paramount concern and that it’s in the West’s interest for it to perform well. And although China’s cyber infringements could, and indeed have, made the country a “strategic opponent,” China nevertheless remains a strategic ally in the Asia-Pacific region.
  • The panel dispelled the notion that Vladimir Putin is an “irrational” leader, since he has presented many thoughtful plans to restore Russia as a superpower. At the moment, the U.S. is giving little pushback on the actions being taken by Putin, particularly in Syria where he is receiving Iranian assistance to support the Assad regime.
  • Focusing on Syria specifically, the panelists agreed that the genocide currently taking place there would result in steep consequences for the society’s youth, who are either killed or left without any access to education, providing a rich pool for Islamic extremists to tap into. The U.S., however, has done little to address the problem, said the panel. They agreed this will be a job for the next U.S. president.
  • There was a general consensus among panelists that sanctions on Iran have been an effective deterrent to Iranian adventurism and sponsorship of mischief in the Middle East. However, under the Superannuation Industry (Supervision) Act (SISA), millions of dollars in assets are being freed, which, unfortunately, will not be used for the benefit of the Iranian people but rather to support Hezbollah.
  • Cybersecurity dominated the entire discussion and permeated all of the topics referenced above. The panel discussed the need for mutual cyber deterrence – governments need to have a deeper and more comprehensive understanding of what countermeasures will be used, and in what instance, in response to a cyberattack. The sense was that the West needs a more mature doctrine in regards to its cybersecurity strategy. The first step in such a strategy is to understand exactly where the vulnerabilities lie. The private sector in the U.S. runs almost all of the critical IT Infrastructure and is also the most vulnerable to cybersecurity threats. In the U.S., there isn’t one single government agency dedicated to cybersecurity that has the absolute authority to assist the private sector whose data and systems are under constant threat. For those private firms, cybersecurity must be a board-level issue and will need to remain so to cope with the persistent and growing cyber threats.

In summary, the geopolitical environment the West faces is highly dynamic as economic uncertainty continues, tensions rise in the East China Sea and the Middle East, Russia flexes its muscles, and cyber threats expand unabated. All of this presents U.S. policymakers with daunting challenges as they evaluate policy options.

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