The U.S. Securities and Exchange Commission has proposed a rule that would impose new cybersecurity disclosure requirements on manufacturers—and the NAM is pushing to make those requirements work better.
The background: The SEC issued guidance in 2018 telling public companies what information about their cybersecurity protections they should provide to investors, but the SEC now feels that more disclosure is warranted.
The requirements: The SEC has proposed a rule that would require two different kinds of disclosures from public companies:
- Cybersecurity incidents: If a manufacturer experiences a material cybersecurity incident like a breach or a hack, the company would have four days to make a public disclosure describing the nature of the incident, what systems were implicated and how the company is responding.
- Governance and risk management: The proposed rule would require manufacturers to disclose the processes they use to identify and guard against cybersecurity risks, with information on their procedures and personnel.
The problem: SEC disclosures are public—and by requiring detailed disclosures about cybersecurity processes and incidents, the proposed rule could force manufacturers to provide a roadmap to potential hackers and cyber attackers.
- At the same time, the inflexible four-day window for reporting cybersecurity incidents means that manufacturers would be required to disclose information about attacks even if an incident is ongoing or the subject of a law enforcement investigation.
- This could potentially interfere with efforts to stop the attack, risking the exposure of sensitive information or implicating national security.
Our move: The NAM has urged the SEC to make commonsense adjustments to the rule in order to protect manufacturers from attacks and give companies the flexibility to respond to cybersecurity incidents appropriately.
- Specifically, the NAM has called on the SEC to adopt a more principles-based approach to the proposed risk management disclosures, allow for greater flexibility with respect to incident reporting and coordinate with U.S. law enforcement and national security experts when finalizing the rule.
Our take: “A final rule that requires timely and accurate reports without instituting one-size-fits-all mandates will ensure that shareholders have access to useful information without exposing businesses, investors, and all Americans to increased risks,” said NAM Managing Vice President of Tax and Domestic Economic Policy Chris Netram. “The NAM strongly supports a flexible approach to cybersecurity reporting, and manufacturers respectfully encourage the SEC to promulgate a final rule that allows public companies to both inform and protect their shareholders.”
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org