TL;DR:
- Heidrick & Struggles’ Annual CISO Survey highlights the increasing importance of the CISO role in organizations.
- AI and machine learning are identified as the most significant cyber risks by 46% of CISOs.
- Cyberattacks, including ransomware, malware, and insider threats, remain a major concern.
- CISOs face mounting stress and burnout, emphasizing the need for succession planning and retention strategies.
- Organizations are seeking diverse and qualified CISOs, expanding beyond traditional criteria.
- The lack of succession plans for the CISO role is a prevalent issue among organizations.
- Board-level expertise in cybersecurity needs improvement despite a rise in CISO representation.
- Compensation for CISOs is on the rise, with the highest levels reported in the financial services industry.
Main AI News:
In an era of a cooling job market, the position of the chief information security officer (CISO) is maturing alongside the increasing technological demands and risks faced by organizations. This revelation comes from the 2023 Global Chief Information Security Officer (CISO) Survey, released today by Heidrick & Struggles (Nasdaq: HSII), a renowned provider of global leadership advisory and on-demand talent solutions. To ensure success and long-term organizational sustainability, it is imperative for organizations and leaders to fully acknowledge the pivotal role of the CISO and proactively prepare for the future. This involves implementing a robust succession plan, investing in cybersecurity expertise and leadership development, and offering competitive compensation packages.
A separate survey conducted by Heidrick & Struggles has shed light on the fact that 76% of executives express a willingness to switch companies within the next three years. This highlights the criticality of succession planning and an intensified focus on retention strategies.
“The escalating significance of cybersecurity in today’s landscape is triggering a transformative shift in the role of the CISO, as organizations confront heightened professional and personal risks,” explains Matt Aiello, Partner at Heidrick & Struggles. “The most progressive companies are taking decisive measures to mitigate risk within the CISO role while bolstering their overall cyber program through comprehensive succession planning, severance protections, D&O policies, and the inclusion of cyber expertise on boards.“
Unprecedented Professional and Personal Risks
The importance of the CISO role continues to surge as digital technologies, particularly artificial intelligence, gain further prominence and concerns surrounding cyberattacks, specifically ransomware, escalate. When it comes to organizational risk, 46% of CISOs have identified artificial intelligence and machine learning as the most significant threat, followed by geopolitical risks at 33%, and cyberattacks at 19%, which encompass ransomware, malware, insider threats, and nation/state attacks. More than half of the respondents believe that the prevailing cyber risks posing a threat today will not remain the same five years from now.
In addition to technological advancements and increasingly sophisticated threats, CISOs are grappling with mounting pressure to stay ahead of the curve, leading to heightened stress and burnout. These concerns persistently rank as the top personal risks for CISOs year after year, as evidenced by 71% of respondents who identified stress related to their roles as their most significant personal risk—an alarming increase from 59% in 2022. Furthermore, 54% of respondents pinpointed burnout as their most substantial personal risk, up from 48% in 2022.
Addressing these challenges necessitates prioritizing succession plans and retention strategies to prevent unnecessary turnover among CISOs. Encouragingly, 80% of respondents concur that, within their roles, they have the capacity to invest in leadership and development to build or enhance team capabilities.
Expanding Opportunities for CISOs Amid Lingering Challenges
The demand for cybersecurity leadership and the specialized skills it entails, coupled with the drive for diversity in executive positions, has become increasingly vital within organizations, executive teams, and at the board level. The survey highlights that companies are now venturing beyond traditional industry- and IT-specific criteria when selecting CISOs, seeking the most qualified executives for the role, while prioritizing diversity in terms of gender, race or ethnicity, as well as industry and functional expertise.
Although the role of the CISO is gaining prominence, numerous organizations are ill-prepared for the long haul. The survey reveals that almost half (41%) of respondents state that their company lacks a succession plan for the CISO role. However, more than half of those without a plan are currently developing one. This underscores the imperative for organizations to anticipate unforeseen departures of CISOs and ensure the presence of a solid plan to facilitate seamless transitions of responsibilities.
Furthermore, the survey indicates that, despite over half of the respondents expressing a belief that their corporate board possesses only partial or no knowledge and expertise required to effectively respond to cybersecurity presentations, merely 30% of CISOs currently sit on a corporate board. Although this figure represents a significant increase from the 14% reported in the previous year, it highlights a critical gap in board-level expertise.
“While it is encouraging to witness a surge in the number of CISOs serving on corporate boards, there is still work to be done in terms of enhancing board knowledge and expertise in cybersecurity,” emphasizes Scott Thompson, Partner at Heidrick & Struggles. “Furthermore, in addition to CISOs, other executives such as CIOs, CTOs, GCs, Chief Risk Officers, and numerous others can provide cyber expertise on boards. There is no one-size-fits-all solution—each board can determine the type of cyber expertise that best aligns with its needs. However, cybersecurity is no longer an area that boards can afford to neglect.“
Compensation on the Rise as Risk Levels Surge
As seen in previous surveys, CISOs worldwide are witnessing an increase in compensation. From an industry perspective, CISOs in the financial services sector report the highest average total compensation, while those in the technology and services industry receive the highest average annual equity/LTI.
Compensation Trends by Region:
- United States: As in previous years, CISOs in the United States generally report the highest compensation. The reported median total cash compensation for US CISOs increased by 6% year over year, reaching $620,000 in 2023. Median total compensation, including annualized equity grants or long-term incentives, also experienced an upswing, reaching $1,100,000 this year.
- Europe: CISOs in Europe received an average total cash compensation of $457,000, with the average total compensation, including annualized equity grants or long-term incentives, standing at $552,000. Similar to the United States and Australia, CISOs in the financial services industry in Europe reported the highest average total cash compensation, reaching $623,000. Conversely, CISOs in healthcare and life sciences in Europe reported the lowest average total cash compensation. For those in technology and services, the average annual equity/LTI was the highest.
- Australia: CISOs in Australia earned an average total cash compensation of $368,000, with the average total compensation, including annualized equity grants or long-term incentives, reaching $586,000. Comparable to the United States and Europe, CISOs in the financial services industry in Australia reported the highest average total cash compensation, at $501,000.
The role of the CISO continues to evolve in response to the rapidly changing landscape of disruptions and new challenges faced by organizations every day. As a result, leaders must recognize the unique yet indispensable position occupied by CISOs within organizations.
Conclusion:
The findings from Heidrick & Struggles’ Annual CISO Survey emphasize the escalating cybersecurity challenges organizations face and the evolving role of CISOs. The identification of AI and machine learning as the foremost cyber risks underscore the need for proactive measures to mitigate these threats. The increasing stress levels and burnout among CISOs necessitate effective succession planning and retention strategies.
Furthermore, organizations must embrace diversity and expand their criteria when selecting CISOs to meet the demands of the evolving cybersecurity landscape. The lack of succession plans and board-level expertise in cybersecurity is a critical area requiring immediate attention. The rising compensation levels for CISOs reflect the recognition of their vital role in safeguarding organizations’ digital assets. Overall, the market should focus on enhancing cybersecurity resilience, developing robust succession plans, and fostering board expertise to effectively combat cyber threats in the future.
