As the European Union’s Digital Operational Resilience Act (DORA) nears enforcement, the role of boards of directors in ensuring compliance has become increasingly critical. DORA isn’t just a technical regulation—it requires strategic oversight and accountability from the top. Here’s what board members need to understand about DORA and their responsibilities in steering organizations toward compliance.
Why DORA Matters at the Board Level
DORA aims to enhance the digital resilience of financial institutions and related entities, ensuring they can withstand and recover from ICT disruptions and cyber threats. Non-compliance carries significant financial, legal, and reputational risks, making it a matter of strategic importance for boards.
Boards must recognize that digital resilience is not just a regulatory requirement but a cornerstone of operational stability and trust. Cyber incidents can severely disrupt operations, erode customer confidence, and incur heavy fines under DORA’s enforcement framework.
Key Responsibilities for Boards
- Strategic Oversight: Ensure the organization has a robust ICT risk management framework aligned with DORA’s requirements.
- Accountability: Boards are ultimately accountable for compliance, requiring regular updates and reporting from senior management.
- Resource Allocation: Approve budgets and investments necessary for compliance, such as tools for risk management, testing, and incident reporting.
- Third-Party Risk Management: Ensure comprehensive oversight of ICT service providers to mitigate third-party risks.
- Governance and Training: Promote a culture of compliance, ensuring that directors and employees understand their roles in operational resilience.
Benefits of Active Board Involvement
Proactive board engagement in DORA compliance ensures:
- Enhanced Resilience: Effective oversight minimizes disruptions and builds trust.
- Cost Savings: Preventive measures reduce the financial impact of incidents and fines.
- Reputational Gains: Demonstrating compliance enhances stakeholder confidence.
Next Steps for Boards
- Educate Themselves: Understand DORA’s requirements and implications.
- Demand Transparency: Require regular updates on compliance progress and incident management.
- Engage Experts: Leverage legal, IT, and compliance professionals to guide strategy.
- Monitor Progress: Establish clear KPIs to track readiness and resilience efforts.
By taking a hands-on role, boards of directors can ensure their organizations not only comply with DORA but also position themselves as leaders in operational resilience.