2015 was an incredible year for cyber security in Nigeria. In May 2015, the cybercrime bill was signed into law in Nigeria by our former President Goodluck Jonathan.1 The implications of this to individuals and corporations is that cybercrime is now properly defined and legal consequences are attached to any defiance of this law. While it is expected that directors in a number of public companies in Nigeria must have included some cyber security matrixes in the risk assessment programmes for their companies, a majority of private companies are yet to put in place effective cybercrime prevention plans. We are still content with playing the ostrich by pretending that cybercrimes are more targeted towards individuals (i.e. through scam emails and identity theft).

It is necessary to understand a number of terms relating to cyber security. Cyberspace refers to the limitless world of information known as the internet. Cyber security is the body of rules put in place for the protection of the cyberspace. Cybercrime refers to the series of organized crime attacking both cyberspace and cyber security. The internet is one of the fastest growing areas of technical infrastructure development. Cyberspace is a world that contains just about anything one is searching for. With the advent of these advancements in information accessibility and the advantages and applications of the internet comes an unprecedented disadvantage- Cyber Crime. Cyber security has risen to become a national concern as threats concerning it now need to be taken more seriously.

The Risk Is Real

Organizations of all kinds are regularly targeted for cyber attack, and the media report a seemingly never-ending series of breaches. In June 2015, the U.S. Office of Personnel Management disclosed it had been hacked, comprising one of the largest breaches of federal employee data in recent years with roughly 18 million current and former federal employees' personal data potentially at risk of being compromised. The highly publicized breaches of Target Corp. and Neiman Marcus - in which the credit cards and addresses of more than 70 million customers combined were compromised - was part of a long list of major attacks in 2014.2

A cyber-attack hit the main website of the British Broadcasting Corporation (BBC) and its iPlayer Streaming service on New Year's Eve at the tail end of 2015. The BBC's websites were unavailable for several hours as a result of the attack. This was the first widely reported cyber-attack of the year 2016. Whilst it is bad enough to hear such news, what should be of main concern is the number of unreported cyber-attacks that have and will occur in 2016. The most horrendous thing that can afflict a company is loss of data as a result of a cyber incident. Accordingly, directors must be concerned to ensure that their companies' have efficient back-up systems in place and that their internet service providers have sufficient cyber security measures in place. As the internet and technology continue to evolve, the world becomes more connected and no one is immune to internet threats.

The Nigerian experience

While the internet has simplified business processes in addition to aiding swift communication modes, it has also brought about a number of unintended consequences such as criminal activities, spamming, credit card fraud, ATM fraud, phishing, identity theft and a blossoming haven for cybercriminals. We now have a developing scenario - the internet cybercrime - which has the capacity to cause destruction of a greater magnitude than the two past world wars- if not properly nipped in the bud. The advent of the internet in Nigeria was a sweet and sour pill. Access to internet facilities has changed the way Nigerian companies interface with the global community, revolutionized our approach to governance and transformed the way critical services are provided. On the flip side, the rate of increase in cybercrime in Nigeria has been quite alarming particularly with the negative perception of Nigerians as a group of scammers. The common cybercrimes in Nigeria include: computer virus and malware attacks, identity theft and privacy invasion, fraudulent electronic transactions and theft of intellectual property. Global tracking of cyber-attacks indicate that Nigeria is one of the countries with high cases of software piracy, intellectual property theft and malware attacks. The situation is a serious challenge considering the enormous opportunities that the internet brings. We can attribute the growth in cybercrimes to lack of awareness of cyber security measures and poor enforcement of guidelines and minimum standards for the security of corporate websites, particularly those hosting sensitive databases.

An annual forecast of Nigeria's cyber security landscape was detailed in PWC's 2015 Nigeria Cyber security Outlook (PWC Forecast). This included forecasts that the likelihood of cyber security issues were expected to reduce towards the last quarter of 2015 as a result of the successful implementation of the Bank Verification Number (BVN) exercise; an initiative powered by the Central Bank of Nigeria (CBN). This prediction was confirmed in a report presented by the Chairman of the Nigeria Electronic Fraud Forum (NEFF) who is also Director, Banking and Payment System Department, CBN, Mr Dipo Fatokun during the forum's annual dinner. He stated that the loss arising from electronic payment fraud had fallen by 63% and there had been a reduction of 45.98% in attempted online fraud by the end of 2015 as against the beginning of the same year. This drop could be partly attributed to the successful implementation of the BVN; a commendable initiative implemented to secure Nigeria's payment system in 2015.

The 2015 forecast also indicated a higher risk of current and former employees or contractors resorting to cybercrime in order to maintain their standard of living. During the course of the year, forensic specialists were kept busy as several companies had to engage digital forensic specialists to investigate cybercrime perpetrated by various suspects who were largely made up of employees and former employees of the victim organizations. While the rate of cybercrimes recorded in 2016 has been significantly lower than the number of cases recorded in 2015, companies still need to make a conscious annual review of their cyber security plans a priority.

The PWC Forecast further highlighted the fact that there would be an increase in cyber-attacks of websites and information technology (IT) infrastructure of political organizations and public institutions, and these would appear as headlines in local dailies. The prediction became a reality and at various points during the year, there were several allegations of hacking attempts on the websites of public institutions and political parties. Some examples are; the reported hack and de-facing of the Independent National Electoral Commission (INEC) website in March 2015 and also that of the Lagos State Government in December 2015. A number of high profile individuals such as the former Finance Minister Dr Ngozi Okonjo-Iweala also had their social network pages hacked by cybercriminals. The worrisome aspect of these developments is the fact that the entities affected by such attacks may not get to know of this development until much damage has been done.

The Role of the Board of Directors

The role of the Board of directors with respect to cyber security was summarized in a statement by Tim Campos, Chief Information Officer, Facebook and board member of JDS Uniphase:

"Any company involved in the Internet or storing confidential customer information on their network must include cyber security as a priority board focus. The board must ensure that management is equipped to manage the risks from cyber security with appropriate knowledge, staffing and budgets."

Boards of directors should be concerned about the following Cyber-security objectives:

  • To help their companies reduce the vulnerability of their Information and Communication Technology (ICT) systems and networks.
  • To help individuals and stakeholder institutions develop and nurture a culture of cyber security through the formulation of cyber-response plans.
  • To work collaboratively with public, private and international entities to secure cyberspace.
  • To help understand the current trends in IT/cybercrime, and develop effective solutions such as the prospects of insuring their company against cyber related risks.
  • To test the functionality of the company's back-up systems and to develop robust cyber security policies in order to manage cybercrime.
  • To be aware of the reputational and financial risks that arise as a result of cyber-attacks.
  • To establish a risk assessment system for cyber security risk.
  • To establish preventive measures in order to protect their companies' information both on the internet and the intranet.
  • To procure the services of specialist consultants in the area of cyber security.

Key aspects of the board's role in managing cyber security risk

Set Expectations for Management

Directors should set the expectation that management will establish an enterprise-wide risk management framework with adequate staffing and budget to oversee cyber security risks.

Boards need to ensure that they are adequately briefed about the company's security model and vulnerabilities. Briefings should occur at least on a quarterly basis, and if the management of cyber risk is allocated to a committee, the full board should also be briefed at least semi-annually. At theses briefings, Management is expected to demonstrate progress on its security strategy and keep the board apprised of challenges and changing priorities.

Antivirus and Anti spyware Software

The need to ensure the functionality of existing Antivirus software which consist of computer programs that attempt to identify, thwart and eliminate computer viruses and other malicious software should be a matter of concern for all companies. In addition, firewalls which protect a computer network from unauthorized access are a necessity. A network firewall typically guards an internal computer network against malicious access from outside the network.

Understand Your Company's Cyber Risk

Boards must ensure that they understand the legal implications of cyber risk. Cyber security measures often require that customers be notified in the event of a breach, and international laws, including privacy practices, may apply to some companies. Companies should have plans in place to deal with these risks. There may also be industry-specific legal concerns.

Prioritize assets

Boards should undertake a thorough analysis of the company's most valuable assets and determine the risk that each might present in the event of a cyber breach or loss. For some companies, assets might include a proprietary database, a chemical formula, a patented manufacturing process or other type of intellectual property. It could be customers' private financial data or competitive research that has been years in the making. A discussion around which risks to prioritize, avoid and mitigate should take place among directors.

Consider cyber insurance

Does the company's insurance policy cover breaches? Is the coverage equal to the value of the company's assets? Some companies may consider buying dedicated cyber insurance as an additional method to transfer or mitigate risk.

Assess Current Cyber security Practices

An assessment of the company's cyber security practices may be carried by posing the following questions:

  • Does executive leadership have a clear and consistent understanding of cyber security relative to the business?
  • Does management understand its responsibility for cyber security and have an adequate system of controls in place?
  • Is the cyber security budget appropriately funded?
  • Is the organization's enterprise risk management program appropriately staffed and resourced given the types of risk assessed?
  • Are there clear policies and procedures in place in the event of a breach?

Hiring an outside auditor to evaluate the company's level of preparedness for a breach.

Boards may want to consider hiring outside experts to explain the latest technologies and best practices to help directors become more educated on cyber risk and preparedness. This is because many companies lack the internal security expertise to manage through a cyber-security program. Resistance to bringing in outside consultants is a red flag that the current cyber security practices and technologies may need updating. Additionally, having brought in an outside expert can pay off later, in the event of a breach: if you can show on record that you have had experts in, then you have a paper trail documenting your preparedness efforts.

Anticipate change.

Companies are especially susceptible to risks during times of change: when they move into new markets overseas, adopt new technologies with unknown vulnerabilities and bring third-party vendors into the fold. Boards need to be sure that they understand new vulnerabilities that emerge as the organization evolves.

Plan & Rehearse

When a breach occurs, there will be pressure to move quickly and management will have to make a series of decisions in a matter of hours. Therefore, it is vital to have policies and procedures in place before a breach occurs. In the words of Malcolm K. Palmore, Assistant special agent in charge, FBI San Francisco Office Cyber Program: "It is critical that the management team and the board have a detailed plan in place. In my experience, the most effective responses to a serious security incident come from those organizations that have prepared in advance and even rehearsed."

To prepare for a breach, it is recommended that the Board:

  1. Review management's response plan: Boards should ask to see management's response plan to potential cyber security breaches. The plan should identify who will be responsible for making decisions when a breach occurs and what actions the company will take in the event of a breach. Some questions to consider:
  2. Create a rapid response team: A dedicated team ready to act in the event of a breach helps ensure that your response goes smoothly.
  3. Establish a relationship with law enforcement: An existing relationship with the local law enforcement agents can save valuable time and resources to help contain the impact of a breach.

    • Under what circumstances will there be a public announcement? If so, when?
    • Do you need to send a notice to your customers?
    • Under what circumstances will you call law enforcement?
    • In the event of a breach, will you bring in a forensic group? If so, will the forensic team report to the board or management?

Summary and Conclusion

Cybercrime in Nigeria is difficult to prove as it lacks the traditional paper audit trail and thus requires the knowledge of specialists in computer technology and internet protocols. Companies thus need to educate their employees on the need to continually maintain and update the security on their systems. They also need to formulate best practices for effective security management. It is important to note that the Act recognizes the use of electronic signatures.3 Putting in place adequate control measures for safeguarding the use of electronic signatures should be a priority for all companies.

The Act is a welcome development but many key stakeholders need to come up to speed in understanding and implementing the Act. We should expect the enforcement of the Act to be more pronounced in 2016. Anyone or organization that violates any of the provisions of the Act should expect to suffer the consequences. Companies are required to share and report threats to the National Computer Emergency Response Team (CERT) in accordance with the Act4. The CERT may propose isolation of the affected computer system or network pending the resolution of the issue. Failure to report shall lead to a denial of internet services and a mandatory fine of N2million. Organizations that need to prosecute violators will need digital forensics services to preserve data in a manner that is admissible in the court of law. Specialists would also be required to analyse digital data to answer key questions such as "where did the data go?", "who had access to it?" and "has it been modified?" etc. Consequently, there will be a rise in the demand for computer forensic professionals.

Given directors' major role in formulating policies for their company, it is important for the directors to ensure that their company's cyber response plans provide guidance on what should be brought to the board's attention, when and by whom. Clearly all companies must have some individual(s) saddled with responsibility for all of the company's IT issues. It is prudent to ensure that such individuals (whether in-house or out-sourced) have the requisite technical and cyber expertise to protect the company against cyber threats.

When it comes to cyber security, vigilance is key. Boards must ensure there is executive ownership - ideally at the top with the CEO and that the management and IT teams are keeping security top of mind as they make decisions about new programs and products.

Even with the best plans in place, it is important to recognize that cyber risk cannot be completely eliminated. Breaches are inevitable, but boards can mitigate risk and damages by staying informed and ensuring that, in the event of a breach, their company is prepared to respond.


[1] Cybercrime Prohibition Prevention Act 2015. (The Act).

[2] https://www.spencerstuart.com/research-and-insight/cybersecurity

[3] Section 21 of the Act.

[4] Section 17 of the Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.