DPO & CISO: A Strategic Partnership to Protect Your Portfolio

Effective governance for information security and data protection across your portfolio is no longer a ‘nice to have’. Regulators are tightening data protection requirements and cyber criminality is becoming ever more sophisticated and prevalent. Thus, issues of data protection and information security form an essential part of protecting enterprise value and ensuring successful exits. However, it may not be practical or justifiable to employ a full time Data Protection Officer (DPO) and Chief Information Security Officer (CISO).

This is where fractional leadership comes into its own, as it provides the expertise expected at an enterprise level organisation, but in a way that is proportionate to the needs of the organisation. The impact of strong leadership in these areas are profound for private equity investors. It is no longer simply about compliance but rather de-risking investments and protecting enterprise value throughout the investment lifecycle:

1.        Regulatory Risk Reduction: The DPO ensures compliance with GDPR and a CISO develops resilience against threats.  Combined, this protects critical assets and reduces the risk of regulatory fines, strengthens customer confidence and provides a commercial advantage.

2.        Exit Readiness: Information governance and data protection standards are increasingly being scrutinised during due diligence for acquisition. Demonstrating that strong data protection and information security frameworks are fully operational is key to enhancing buyer confidence and increasing valuation.

However, this can be taken one step further by working with a single provider for both DPO and CISO leadership. While the role of the DPO and CISO are distinct, one focusing on data protection and compliance and the other on technical controls, threats and protecting IT infrastructure; there is deep symbiosis between the two. When the DPO and CISO work in silos, the organisation faces increased risk of gaps in compliance and security. Resilience comes only when both parties work collaboratively to ensure that data protection and information security are truly embedded within the organisation.

Clients understandably want to reduce risks to their business and thus often use multiple suppliers to mitigate risk, but this can be counterproductive when looking for a fractional DPO and CISO. Engaging with a boutique firm with a DPO and CISO who regularly work together and have a deep understanding of how the other works is crucial because of the synergistic nature of their roles and it provides tangible benefits.

1.         Faster Implementation: Joint methodologies will reduce duplication, reduce the risk of gaps and accelerate the implementation of compliance and security controls.

2.         Portfolio-wide Consistency: One provider across your whole portfolio ensures harmonised reporting, risk assessment  and mitigation strategies which ultimately leads to smoother exits.

3.         Simplified Communication: One provider gives you one point of contact and ensures a seamless flow of information between the compliance and security functions.

4.         Aligned Priorities: Both work together, avoiding conflicting recommendations which slow down projects and increase costs.

This results in a cohesive governance model in which requirements feed directly into technical controls, and which provides assurance for investors, regulators and potential buyers.

Data protection and information security are now critical to risk management, portfolio performance and exit strategy and using fractional DPO and CISO services provide a pragmatic and cost-effective solution. When both these services are delivered through the same provider this is further enhanced because both roles are wholly complementary and cannot be viewed in isolation.

Eleni is a Director of Penpole Consulting, a Cyber Security service provider that helps Private Equity firms maximise portfolio company value by improving cyber security posture and reducing operational risk.