The moat is dry – Part 2: A roadmap for rebuilding

When NotPetya hit Merck in 2017, it didn’t climb a wall. It came in through trusted vendor software, the routine traffic every perimeter is built to admit, and Merck put the damage at more than $1.4 billion. Its insurers then tried not to pay, and after that fight, underwriters started asking much harder questions.

AI has since made attacks like that cheaper and faster. In IBM’s 2026 Cost of a Data Breach report, one in four malicious breaches was AI-enabled, and breaches that took more than 200 days to find and contain cost about $1.3 million more than those that didn’t. Deepfaked executives, software that can be talked into things and AI agents holding credentials are attacks on trust first and technology second.

Yet the people we hold responsible are set up to lose. Some 64% of CISOs still report into IT leadership, only 10% influence financial decisions, and only a quarter say board discussions of cyber risk run longer than 30 minutes. They are accountable for the breach without budget authority, and they check the work of the people they report to.

The organizations that feel safest about the next two years are not the ones with the most tools. They are the ones where leadership understands AI risk, someone clearly owns it, and the security team has the authority to act. That is a governance problem, and it has a governance fix.

A roadmap for reconstruction 1. Take security out of IT, and do it before the breach No company lets the finance department audit its own books. That is why internal audit reports to the board’s audit committee rather than to the CFO.

Security deserves the same independence for the same reason: the people who build and run the systems should not vouch for them. The CISO’s job is not to run technology. It is to govern how people, partners and machines behave around the things the organization cannot afford to lose, and to tell leadership the truth about that risk.

That does not make the job less technical. A CISO who can’t read an architecture diagram, question an engineer or spot a vendor’s overstatement will be steamrolled in the first meeting. The role needs an engineer’s depth.

It is just bigger than engineering, the way a general counsel needs to know the law but is hired for judgment. In practice, that means a direct line to the CEO and a board committee. Equifax did this after its 2017 breach.

Its new CISO, Jamil Farshchi, called the direct line to the CEO and board the key to the turnaround, and noted that it costs nothing. Vertex Pharmaceuticals took a different route: its CISO reports to the Chief Scientific Officer, which puts security next to what the company actually protects, its research. Choose a model deliberately.

Most organizations never choose; they inherit one. 2. Hand the CISO the AI governance pen Only 19% of organizations report coordination between their AI governance and security teams.

Every AI tool the business adopts is a security design decision, and it needs one accountable owner. Otherwise, you have a committee that approves tools and a security team that finds out later. But accountable doesn’t mean alone, which brings us to the most important step.

3. Give everyone a voice A CISO knows security. A CISO does not know research, or claims processing, or the manufacturing line.

Elevating the CISO works only if decisions get made with the people who live with them: research leaders, business owners, legal, finance and the CIO. Build a standing risk council where those voices shape controls before they’re imposed, and where a scientist can say “this will break my work” and be taken seriously. The point of elevating the CISO isn’t to put one person in charge of everyone else’s work.

It’s to make sure the person who owns the risk is in the room, and that everyone affected by the decision is in the room too. Security decisions made in isolation get worked around. Decisions made together get followed.

4. Define “ready,” then hire and develop to it New York’s cybersecurity regulation for financial firms calls the CISO “a qualified individual” but never says what qualified means. Here’s a working definition, in the form of two tests a board can give.

The first is technical, and it is not optional: Can you tell us what we own, who can reach it, and how fast we can recover, and when did we last test that? Have you personally used the AI tools our employees use? Can you explain prompt injection and agent permissions to us in plain English?

Where does your threat knowledge come from besides vendors: peer networks, industry information-sharing groups, red-team results? The second test is about judgment and behavior. It is the one most security leaders are never given: What do our people actually do when a request seems urgent and comes from someone senior?

Which risks have you advised us to accept, and why? A CISO who never recommends accepting a risk is a gatekeeper, not a risk officer. Can you translate a risk into dollars and days of downtime?

Which research and business leaders do you consult before a control changes how they work? And one question for the board itself: Have we given this person authority that matches their accountability? 👉 Click here to download a sample CISO job description👈 5. Make sure AI agents are governed like employees The CISO doesn’t provision these accounts; the CISO makes sure someone is accountable for every one of them.

Every non-human identity needs an owner, the least privilege it needs, monitoring, and a kill switch. Among organizations that had an AI-related incident, 92% lacked proper AI access controls. 6.

Hold everyone to the clock, not the checklist Ask every part of the organization for time to detect, time to contain and time to recover, using tested numbers rather than estimates, and report them to the board. The 200-day line in IBM’s data is worth more than a million dollars per breach. 7.

Make sure the boring things get done Encryption, multi-factor authentication, asset inventory and network segmentation are not glamorous, but they are exactly what insurers began requiring after the Merck case. Doing this work belongs to the technology teams. The CISO’s job is to verify that it’s done and to tell the board plainly when it isn’t.

If your underwriter is asking for these controls, your board should be too. 8. Give the board more than 30 minutes Make cyber a budget conversation rather than a status update.

If the CISO’s board time is spent on regulatory trends instead of business trade-offs, the board is being briefed, not governed. A word to CIOs I know how this reads to a CIO: someone telling you to give up a direct report. But a CISO who reports to the CIO is grading the boss’s homework.

The CIO is measured on availability and speed of delivery. The CISO is measured on risk. That tension is healthy only between peers.

Elevating the CISO doesn’t diminish the CIO; it frees the CIO to build without also serving as auditor of what they built. The two roles aren’t a senior and a junior version of the same job. One builds and runs the organization’s technology.

The other is responsible for whether the organization, its people included, can be trusted. A good CIO should lean on the CISO and also be a little afraid of the CISO, the way a good CFO relies on the auditor and is a little afraid of what the auditor will find. That fear is not hostility; it is the reason the books stay clean.

Pair it with the partnership described above, and the CIO gets something no direct report can offer: someone with the standing to say “no, not like that” before the board has to hear it from an attacker. The CIO’s seat at the table appeared when technology became the business. The CISO’s is appearing because trust has become the business, and AI has made that impossible to ignore.

Some organizations are already moving. In IBM’s follow-on research, 85% said they plan to increase security spending after learning what frontier AI models can do to their systems, compared with 64% who planned to spend more after suffering a breach. Learning from the threat is far cheaper than learning from the post-mortem, and the organizations that get there first will be the ones where security, research and the business decide together.

The moat is dry. Stop dredging it, and give the person defending the castle a seat at the table.