Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mr. REED. Mr. President, today I am reintroducing the Cybersecurity Disclosure Act along with three members of the Select Committee on Intelligence, Chairman Warner and Senators Collins and Wyden, in addition to Senators Cortez Masto and Cramer, who serve with me on the Senate Banking Committee. In response to serious data breaches of various companies, our legislation asks each publicly traded company to include--in Securities and Exchange Commission (SEC) disclosures to investors--information on whether any member of the Board of Directors is a cybersecurity expert, and if not, why having this expertise on the Board of Directors is not necessary because of other cybersecurity steps taken by the publicly traded company. To be clear, the legislation does not require companies to take any actions other than to provide this disclosure to its investors.

As EY, also known as Ernst & Young, noted in an August 2020 publication, ``Public disclosures can help build trust by providing transparency and assurance around how boards are fulfilling their cybersecurity risk oversight responsibilities.'' Investors and customers deserve a clear understanding of whether publicly traded companies are prioritizing cybersecurity and have the capacity to protect investors and customers from cyber related attacks. Our legislation aims to provide a better understanding of these issues through improved SEC disclosures.

While this legislation is a matter for consideration by the Banking Committee, of which I am a member, this bill is also informed by my service on the Armed Services Committee and the Select Committee on Intelligence. Through this Banking-Armed Services-Intelligence perspective, I see that our economic security is indeed a matter of our national security, and this is particularly the case as the pandemic has forced many of us to be ever more dependent on technology and the Internet.

Indeed, General Darren W. McDew, the former Commander of U.S. Transportation Command, which is charged with moving our military assets to meet our national security objectives in partnership with the private sector, offered several sobering assessments during an April 10, 2018 hearing before the Senate Armed Services Committee. He stated that ``cyber is the number one threat to U.S. Transportation Command, but I believe it is the number one threat to the Nation . . . in our headquarters, cyber is the commander's business, but not everywhere across our Country is cyber a CEO's business . . . in our cyber roundtables, which is one of the things we are doing to raise our level of awareness, some of the CEO's chief security officers cannot even get to see the board, they cannot even . . . see the CEO. So that is a problem.''

With growing cyber threats that have resulted in serious breaches, we all need to be more proactive in ensuring our Nation's cybersecurity. This legislation seeks to take one step towards that goal by encouraging publicly traded companies to be more transparent to their investors and customers on whether and how their Boards of Directors and senior management are prioritizing cybersecurity.

I thank the bill's supporters, including the North American Securities Administrators Association, the Council of Institutional Investors, the National Association of State Treasurers, the California Public Employees' Retirement System, the Bipartisan Policy Center, MIT Professor Simon Johnson, Columbia Law Professor Jack Coffee, the Consumer Federation of America, and Rhode Island General Treasurer Seth Magaziner, and I urge our colleagues to join in supporting this legislation.

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