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Be Proactive on Cybersecurity Due Diligence for Cyber Peace

By William Vogeler, Esq. on August 02, 2017 3:59 PM

In the fallout of the cyberwar on politics and business, few are working on achieving cyber peace.

Scott Shackleford, a law professor and researcher, is one of those few. He says peace will come from proactive policies, not after-thoughts in the aftermath of major cybersecurity breaches.

"Achieving some measure of cyber peace requires the active involvement of public and private stakeholders," he says. For in house counsel, that means applying due diligence standards to cybersecurity.

Cybersecurity Due Diligence

In the Chicago Journal of International Law, Shackelford wrote that companies need to create a norm of cybersecurity due diligence before the next attack. That was 2015, and a lot has happened since then.

Last year, Yahoo announced it suffered the biggest cyberattack in corporate history. More thatn 1.5 billion user accounts were hacked -- and at the worst time for the company.

The fallout cost Yahoo at least $350 million in its merger with Verizon, which bought the company at a reduced price after the hacker news broke. Yahoo's general counsel also lost his job over it.

In other words, cybersecurity can get very personal for in house counsel. It's part of the reason in-house lawyers are doing more due diligence with mergers and acquisitions.

More Emphasis on Cybersecurity

"[C]oncerns about potential liability due to cybersecurity are making buyers take a much closer look at companies they plan to buy," according to Morrison & Foerster's M&A Leaders Survey.

Eighty-two percent of the survey's respondents, including executives, investors and general counsel, place more emphasis on cybersecurity than they did in the previous year.

As governments grapple with the same problem, Shakelford and other experts see the cross-section in the global economy. Policy-makers need to practice due diligence in cybersecurity to achieve economic peace.

"Cyber risk should be considered right along with financial and legal due diligence considerations," said Jason Weinstein, former deputy assistant attorney general at the U.S. Department of Justice.

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