SBS CyberSecurityApril 10, 20257 min read

Shifting the Board from a Reactive to Proactive Cybersecurity Mindset

Shifting from Reactive to Proactive Cybersecurity Mindset | SBS

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Financial institutions are the economic engines of our communities, and as artificial intelligence and quantum computing continue to expand into our daily lives, these economic engines face increasing cybersecurity threats. Leading each financial institution is a board of directors that oversees the governance and provides the direction for a smooth operation that addresses customers’ financial needs. The board's fiduciary responsibilities have expanded significantly as cyber threats have intensified, making cybersecurity oversight a critical component of their oversight role. The board is accountable not only to its shareholders for profitability but also to employees, customers, and the community it serves. It must ensure compliance with laws and regulations to uphold a safe, efficient, and sound financial industry.

As part of their oversight role, leadership must ensure that the information security program (ISP) is effectively managed. The program’s effectiveness is evaluated under the management component of the CAMELS rating system, which assesses capital adequacy, asset quality, management quality, earnings, liquidity, and sensitivity to market risk. While traditionally focused on financial health, CAMELS also underscores the importance of a strong, proactive ISP in supporting these elements by prioritizing information security in all operational areas.

Board of Directors’ Responsibilities in Cybersecurity

Managing the ISP is a team effort, requiring engagement across all operational areas. To establish an organization that proactively manages the ISP, the board of directors annually appoints an information security officer (ISO) to oversee the activities involved in maintaining a well-managed ISP. While the board is ultimately responsible for the ISP, the ISO oversees daily information security activities and provides the board with at least an annual report on the ISP’s overall status.

Additionally, the board of directors appoints an information technology (IT) committee to oversee day-to-day IT operations and information security (IS) risk management. The board appoints members and the chairperson of the IT committee, with the ISO serving as a member or the chairperson. Leadership reviews IT committee minutes and reports, offering credible challenges before granting approval.

While much proactive management is delegated to the ISO and the IT committee, the board of directors sets the overall security tone. They guide technology investments and ensure those investments are protected. Ultimately, the board’s decisions shape whether an organization adopts a reactive or proactive cybersecurity mindset — intentionally or not.

Proactive vs. Reactive Cybersecurity Mindset

According to the 2025 PwC Global Digital Trust Insights, 66% of technology leaders identified cybersecurity as their top risk in 2024. Yet, only 2% have fully implemented cyber resilience across their organizations, highlighting a major gap between awareness and action. Similarly, The Conference Board’s 2024 C-Suite Outlook found that only 9% of CEOs consider cybersecurity a critical long-term investment. This further illustrates the disconnect between recognizing cyber risks and addressing them proactively.

The different types of mindsets include:

Passive: This approach focuses only on meeting regulatory requirements and does not offer real protection from today’s advanced cyber threats.
Reactive: This is a step beyond passive, as it addresses findings and recommendations from IT exams and audits. While this can provide additional protection, it is not enough to prevent or properly respond to a cyber incident.
Proactive: This forward-thinking approach goes beyond compliance by aiming to understand current threats and build a security plan that anticipates them while still meeting regulatory standards.
Innovative: This mindset doesn’t just anticipate threats — it leverages IT and IS risk assessments and emerging technologies to make better, more informed decisions. It allows leaders to quantify risk and deploy the right controls to mitigate the most risk of a cyber incident.

Graphic detailing the cybersecurity mindset spectrum.

Managing an organization with a passive cybersecurity mindset is like burying your head in the sand and hoping the storm passes. Leaders who only react to external pressures — such as regulatory changes, cyber incidents, or audit findings — are driving forward while staring in the rearview mirror. To stay ahead of modern cyber threats, management must take a forward-looking approach, proactively planning for security challenges while using risk intelligence as a GPS to steer toward greater cyber maturity.

Shifting from a reactive to a proactive or innovative cybersecurity mindset is one of the most impactful decisions a board can make. This approach safeguards technology investments and strengthens the protection of sensitive information.

Why a Reactive Cybersecurity Approach Falls Short

When a board of directors maintains a reactive mindset, the organization often struggles with poor risk management, operational inefficiencies, and unprepared responses to cyber incidents. This lack of preparation can lead to uncontrolled spending, higher recovery costs, and disruptions that impact business operations and customer trust. A reactive approach becomes evident when audits consistently reveal compliance gaps or risk management practices fail to meet industry standards.

The consequences of a reactive mindset extend beyond audits. Organizations that fail to anticipate cyber threats may experience prolonged downtime following an attack, leading to significant financial impacts. Additionally, natural disasters or other disruptive events can expose vulnerabilities, leaving the organization unable to serve customers when they need it most.

Remaining reactive fosters a culture of stress and uncertainty, where leadership waits for auditors or regulators to dictate necessary actions. This can create a false sense of security (“We passed our exam, so we must be protected!”) while leaving doubts about whether enough has been done to safeguard the organization. Ultimately, operating reactively leads to inefficiencies, higher costs, and an unpredictable approach to cybersecurity risk management.

Benefits of a Proactive Cybersecurity Mindset

A proactive ISP not only helps safeguard assets but also reinforces strong risk management practices, encouraging collaboration across departments and embedding security as a priority in every operational area. However, to truly foster this approach, the board must remain actively engaged, setting the tone for the entire organization.

A proactive board of directors does not wait for audits or examinations to dictate security measures. Instead, it takes the initiative to continuously assess risks across all areas, identifying vulnerabilities and implementing mitigation strategies before threats materialize. This forward-thinking approach ensures that the organization is better prepared to handle potential cyber incidents or business disruptions.

The advantages of this proactive mindset go beyond regulatory compliance. While immediate benefits include stronger audit outcomes and enhanced risk management, organizations with a proactive approach are better positioned to weather cyber incidents and recover from disruptions over time. Regularly assessing risks, implementing security controls, auditing measures, and educating employees all contribute to building long-term resilience.

CybersecurityMaturityLifecycle

For board members and senior leadership, adopting a proactive cybersecurity strategy fosters confidence, reduces uncertainty, and strengthens the overall security posture. With risks actively managed, the organization is in a stronger position to face current and emerging challenges.

The Board of Directors Sets the Culture

The board of directors plays a pivotal role in establishing a cybersecurity culture. They are responsible for deciding whether to cultivate a proactive mindset or stay reactive. Over time, the outcomes of this decision will become evident. A proactive mindset reduces financial losses, streamlines processes, improves control over potential risks, and provides a competitive advantage over industry peers.

The decision has been made, and the results are now clear. It’s time for the board to assess whether the organization is operating with a proactive or reactive mindset. Reflect on your current approach, evaluate gaps, and consider any necessary adjustments that will better protect your shareholders, employees, depositors, and community.

4 Key Questions to Assess Your Cybersecurity Mindset

To help evaluate whether your cybersecurity approach is proactive or reactive, here are four questions to ask:

Are we proactively addressing cybersecurity or only reacting when necessary?
Do we use risk assessments to shape our cybersecurity strategy or just check off regulatory boxes?
Do we understand the threats and assets that matter most or only address risks after the fact?
Are we prioritizing investment in cybersecurity or viewing it as a cost to minimize?

Embracing a Proactive Cybersecurity Future

Shifting from a reactive to a proactive cybersecurity mindset is key to long-term success and resilience. As cyber threats grow more sophisticated, the board of directors must lead the way in fostering a security-first culture. A proactive approach not only reduces financial losses and improves risk management but also equips organizations to anticipate and mitigate emerging threats with confidence. This mindset enhances security while driving more efficient and resilient operations.

As a leader, it’s essential to assess whether your current cybersecurity strategy is keeping pace with evolving risks. Taking decisive steps toward a proactive approach empowers boards to strengthen defenses, improve operational effectiveness, and safeguard their most valuable assets.