DZS INC. 10-K Cybersecurity GRC - 2024-08-13

Page last updated on August 13, 2024

DZS INC. reported their cybersecurity risk management and governance process in a yearly 10-K filed on 2024-08-13 17:03:07 EDT.

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10-K filed on 2024-08-13

DZS INC. filed a 10-K at 2024-08-13 17:03:07 EDT
Accession Number: 0000950170-24-096409

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Item 1C. Cybersecurity.

ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We recognize the importance of establishing governance and oversight over cybersecurity risks, and we have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF, and the MITRE ATT&CK(R) Framework. This does not imply that we meet any particular technical standards, specifications or requirements, only that we use the NIST CSF and the MITRE ATT&CK(R) as a guide to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. Key aspects of our cybersecurity risk management program include the following: - risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services and our broader enterprise IT environment; - a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls and (3) our response to cybersecurity incidents; - the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls and processes; - cybersecurity awareness training of our employees, incident response personnel and senior management; - a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and - a third-party risk management process for key service providers, suppliers and vendors. The landscape of cyber threats is constantly evolving, making it increasingly challenging to effectively defend against them or implement sufficient preventative measures. We have observed a rise in the volume, frequency, and sophistication of cyber-attacks. To date, no risks from cybersecurity threats or previous cybersecurity incidents have materially affected our business strategy, results of operations, or financial condition. However, there can be no assurance that our controls and procedures in place to monitor and mitigate the risks of cyber threats, including the remediation of critical information security and software vulnerabilities, will be sufficient and/or timely and that we will not suffer material losses or consequences in the future. Additionally, while we have in place insurance coverage designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all insured losses or all types of claims that may arise. See Item 1A “Risk Factors - Cyberattacks or other security incidents that disrupt our operations or compromise data, may expose us to liability, harm our reputation or otherwise adversely affect our business.” 31 Cybersecurity Governanc e This risk management approach informs decision-making processes related to the company’s strategic priorities, the allocation of resources, and the establishment of oversight mechanisms. Our Board considers cybersecurity risk as part of its risk oversight function, and the governance of this program resides with our Board, which bears the ultimate responsibility for the oversight of cybersecurity risks. Supporting the Board, the Audit Committee plays a pivotal role by engaging in regular reviews of our cybersecurity efforts in collaboration with management and providing periodic updates to the Board. These assessments are conducted regularly, with additional sessions convened as needed to address emerging issues or refine strategies. In addition, management updates the Board, as necessary, regarding any significant cybersecurity incidents. Our Chief Operations Officer is primarily responsible for assessing and managing our material risks from cybersecurity threats and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. He/She stays informed about and monitors the prevention, detection, mitigation and remediation of key cybersecurity risks and incidents through various means, which may include briefings with internal and external security team members, threat intelligence and other information obtained from public or private sources and alerts and reports produced by security tools deployed in the IT environment. Our cybersecurity management team includes our corporate global applications director, who leads the operational teams responsible for enterprise security, data governance and enterprise incident response, and global operations, and our senior vice president of cloud edge and engineering operations, who leads the operational teams responsible for product and cloud security, data governance and product security incident response. Our operational cybersecurity teams are comprised of members with decades of collective experience in IT security systems, tooling, operations, and governance, and hold various IT security industry certifications and have received specialized cybersecurity training. 32

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