| US corporate security spending has increased only modestly since September 11th In a process of ‘evolution rather than revolution,’ corporate America's overall spending on security in response to terrorism has increased only modestly, The Conference Board reports in a comprehensive new study, which was sponsored by ASIS International (ASIS). The research report, entitled Corporate Security Management, shows that the average increase in security spending has been 4 percent since September 2001. Most likely to have permanently increased their security spending are those in six critical infrastructure industries - transportation, energy and utilities, financial services, media and telecommunications, information technology, and healthcare. While top security executives generally believe they have adequate control over security decisions in their firms, many say they don't have enough financial resources to do their jobs. Only 26 percent of the security directors, 19 percent of the risk managers, and 14 percent of the information technology security chiefs strongly agree that their departments are adequately financed. The study was based on a cross-country survey of more than 331 US business security directors, risk managers and information technology security officers. More than half of the companies covered in the study generate more than $1 billion per year in sales. The Conference Board is a non-partisan, not-for-profit business research organisation. "While nobody knows how much security spending is enough, there are legitimate concerns about corporate vulnerability," says Tom Cavanagh, The Conference Board's expert on security issues and author of the report. "Since about 80 percent of America's critical infrastructure is controlled by the private sector, corporate security managers will play an increasingly vital role in protecting key industries and the people who work in them and are based near them." Daniel Kropp, CPP, president of report sponsor ASIS International, says that "A four percent median increase in security spending seems counterintuitively small in light of our concerns about terror," but he sounds two cautionary notes: "First, whether corporate spending on security is adequate can't be judged nationally, but only by comparing it against the level of threat and the degree of risk faced by an individual company in an individual industry in a selected location. Second," he adds, "throwing money at a problem isn't going to solve it. Given our nation's knowledge and experience at the time, it's hard to imagine the security system that would have prevented what happened on 9-11, or that can protect us from every possible threat today." While many security experts anticipated a widespread move to centralise security operations in the wake of terrorist actions, the study found that most companies have not changed the way they manage security. Only 24 percent of them have centralised security responsibility in a chief security officer and few apparently are interested in creating this relatively new position. Most companies employ less than 50 people to oversee all their security needs, though many use outside security consultants and guard forces to augment their staffs. The study also found soaring increases in corporate spending for insurance and risk management. It reports that median spending for these two business essentials are up 33 percent. About 20 percent of the companies say their insurance costs have at least doubled since 2001. The current corporate financial environment is still marked by tight budgets and widespread cost cutting. Virtually all new company spending is being directed only at revenue-generating projects. Says Cavanagh, "There are only two sources of funds to expand security spending - corporate money or government funds and incentives. Business leaders are reluctant to spend more on security when they don't see it contributing directly to their bottom lines." Marene Allison, an ASIS International member and Director of Security for Avaya, Inc., explains that corporations that are managing security differently may in some cases be spending little more or even less than they were spending before 9-11. "You sometimes can accomplish a great deal," she says, "by thoroughly reviewing your vulnerabilities, policies and procedures and making necessary changes. That is not always a substitute for investment in additional personnel and equipment," she adds, "but creativity sometimes can help improve security without increasing costs dramatically."
•Date:
10th July 2003 • Region: N.America
•Type: Article •Topic:
Terrorism
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