When a new leader takes the helm, their decisions and maneuvers can cause a ripple effect that can be felt throughout your organization – especially when it comes to technological infrastructure. Even the most minute change can affect the delicate balance of technology within your organization and impact your control environment.
During a leadership transition, CFOs have an opportunity to play a critical role in ensuring the passing of the baton is smooth and secure. Taking the right steps to ensure consistent operations of key controls during times of change is essential to keeping every aspect of your company secure.
Where Do Things Go Wrong?
Many scenarios could occur for a leadership change to create a technological disruption. Perhaps your new CEO doesn't have a strong technological background, so they're not focused on strengthening internal control processes, which increases the possibility of preventable risk. Or, they want to shake things up from the beginning, introducing new services or technology. Switching vendors or adopting different software tools without proper planning, vetting and evaluation can create vulnerabilities.
Recent headlines demonstrate changes in leadership have the potential to call digital operations into question. For instance, consider the recent takeover of one of the most prominent social media companies. Immediately upon acquisition, the new CEO took a hard-lined approach by significantly restructuring staff and fast-tracking product updates.
In situations where moves like these occur, leaders will want to be mindful of a potential public loss of confidence, or resulting operational issues, which can result in negative publicity. This can have down steam impacts: remaining staff can be left scrambling to plug vulnerabilities and shoulder the added workload left by those let go. Meanwhile, frustrated users of the company's applications can face glitches, bugs, and other disruptive issues.
Another example is the recent collapse of a well-known cryptocurrency exchange group. The absence of a robust control environment led to the first crack in its fragile framework. For businesses looking to safeguard operations with potential leadership shifts in mind, some basic business process controls can help stop or identify issues in control environments early on.
While navigating a leadership change, risk management is essential to continue operating ethically and remaining compliant. With the proper considerations in place, you can position your company to be as best prepared as possible when it steers into the unknown.
How to Avoid Technological Pitfalls
As many CFOs know, when leadership changes in an organization, everything could change, or nothing could change. Being proactive instead of reactive is the key to being prepared for any scenario. You must ensure all your bases are covered if changes are made to processes and technology, and perform due diligence to confirm other areas aren't affected.
When anticipating a change in leadership, consider how that change will affect your organization's processes and technology, as well as the continued operation of your internal controls. Be ready to address any potential problems swiftly and with proper communication from the top. Conduct an assessment of all IT systems, and evaluate and audit security protocols. Also, be sure to equip your team with the necessary knowledge and tools required for data protection today. And finally, analyze how third-party services might help reduce risk during times like these when changes require you to depend on them more than ever before.
Having an independent party study your controls to ensure they're secure and ready for a leadership transition can help increase consumer and stakeholder confidence. Furthermore, investing in a SOC report can validate that your controls are in place, adequately designed and operating effectively, ensuring customers and other interested parties that their data is protected.
A leadership change can be an exciting and challenging time for any organization. As your company shifts to a new leader, undergoing a SOC report can help you to gain an edge over your competitors and provide extra assurance to your clients. Our team of experts at CBIZ has vast experience in protecting sensitive information during leadership transitions, so let us take the reins and guarantee that your sensitive data will remain secure. Connect with our seasoned experts today.
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