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Investment Diligence

Investment professionals are largely unaware of the magnitude of the battles being waged on business computer networks today. Newspaper headlines about stolen laptops and credit card data tell only a small part of the story. Companies are losing valuable trade secrets and business intelligence at a staggering rate, with consequences for future revenues and earnings. These events have become so frequent and severe that some have called it “the greatest transfer of wealth in human history."

Unfortunately, the information available to investment professionals has been inadequate or unclear. Companies have not disclosed or accounted for important information about cyber risks and events, either because they do not know what is happening on their networks, or because they are worried about the impact that disclosure will have on their reputation and valuation.

Investment professionals need to gain access to material information about cyber risks and events. Recently, the Securities and Exchange Commission issued guidance addressing this challenge by requiring publicly traded companies to disclose such information. The guidance has brought about some disclosures, but investment professionals must also be equipped to collect information through their own diligence on cyber issues.

Ultimately, investment professionals need to know how to analyze risks and events and determine their impact on valuations and investment decisions. Good Harbor understands the financial implications of cyber risk. We help investment professionals assess the impact of cyber risks and events on their work through services including Cyber Risk Briefings and Cyber Diligence.