"Since the beginning of the year we have serviced about 350 different clients that have had spearphishing attacks," said Michael Bruemmer, vice president for data breach resolution at Experian Information Solutions. "About a third were specifically targeted at board members."
Board members get emails asking them for tax information or requesting bank transfers, which they typically forward to the company employee who is responsible and asking them to take care of it.
In addition, they also get phishing emails specifically targeting them as board members.
"We're seeing that the board members are not being prepared for a phishing email or to recognize a social engineering attempt," Bruemmer said.
Clients have reported losses of financial statements, cybersecurity strategy documents and protocols, and intellectual property such as new patents and inventions, and classified documents.
And it's not just spearphishing that's a problem, he added.
"Most board members use personal email accounts to handle board communications so they don't get mixed with the emails from the companies where they work," he said. "These are less secure, and we have seen examples of these accounts having been compromised."
For example, many users have the same login credentials for their email accounts as they do for other websites, he said.
"It's definitely a problem," said Larry Ponemon, chairman and founder at research company Ponemon Institute. "This is a definite area of vulnerability for many organizations. In our research, there were a number of cases where board members shared sensitive or confidential information, usually not maliciously."
Last week, Ponemon released a report about protecting confidential company information.
One company aware of the risks is Orrstown Bank, which has 25 branches in Pennsylvania and Maryland.
"These are all things that we definitely worry about," said Andrew Linn, CISO at the Shippensburg, Pa.,-based Orrstown Bank.
The bank currently provides an Orrstown bank email address to its board members, as well as security training. Over the last few months, the bank has also begun rolling out mobile device management from Good Technology, now owned by Blackberry.
This allows confidential bank data to be isolated from personal data on the directors' devices.
"We have the ability to wipe that container and now have it available to anyone else who might stumble on the device," Linn said.
Board members also get iPads where they can click on an app icon to get access to information, he added.
So far, he said, board members have been understanding about the need for security, but he recommended that the directors be educated about security from a business perspective.
"If you're talking about packets that are dropped at the firewall, their eyes are going to glaze over in seconds," he said. "When you're talking to the board about the importance of protecting information, you need to describe in business terms why it's important, such as the impact on our organization if a document about mergers and acquisitions were to get out."
On the back end, the bank is using IBM Lotus Quickr for sharing content, but is looking for a cloud-based replacement.
"Quickr is not in the cloud, and we don't want to maintain any on-premise solution," Linn said. "And it's essentially an end of life product, and they're not patching it."
But there are other potential benefits to moving to the cloud, as well.
Some vendors, for example, add another level of security to the documents, preventing recipients from forwarding them to unauthorized recipients, such as cybercriminals using clever social engineering tactics.
Diligent, for example, which counts 40 percent of the Fortune 1000 among its clients, allows companies to prevent recipients from forwarding sensitive documents, or even printing them.
"We would not be allowed to bring a tool like Diligent into Barclays unless the security was Fort Knox," said Ross Surace, senior technology partner for head office functions at Barclays Bank, in a statement.
The Diligent platform is primarily used for board member communications, said Diligent CEO Brian Stafford. The company says it has 100,000 users who are directors of corporate boards, half of them based in the U.S.
In addition to security, ease of use is a top priority, he added.
"The main challenge with implementing board-level security is getting board members to use it," he said.
The system works via a proprietary application that needs to be installed on an iPad, Windows tablet, or a personal computer, which provides secure access to the documents. Android tablets are currently not supported, but that will change by the end of this year.
Recipients who don't have the app installed, or need to access a document from a different device, can also get to it on the web.
The application also highlights the changes in documents that have been revised, said Stafford. Documents can be uploaded in any common format, including Excel and Word, and are converted to a proprietary version of PDF.
If the tablet or laptop is stolen, the documents can be wiped remotely. On a laptop, there is also a time-out period after which the application will request a login and password.
"Board members, who are 65 years old on average, are less tech savvy than some younger folks," he said. "Combine that with sophisticated phishing attacks and other hacks, and you've got a situation where more security is definitely required. Even the most tech savvy people are not immune to hacks, let alone someone using a free email provider from the 1990s."
Stafford said that his company has analyzed the email platforms used by corporate board members, and found that 21 percent of directors in the U.S. use free consumer email service providers, with Google's Gmail the most popular, followed by AOL and then Yahoo.
Those board members who don't use free public email will often use email accounts from the companies where they work, he added.