There is rising recognition across the Private Equity ecosystem that cyber security must play a more central role during due diligence. The challenge is no longer awareness; it is how cyber risk is being assessed and translated into meaningful commercial decisions.
Often cyber diligence exercises still produce highly technical or framework-led outputs that offer limited value to investment teams. A maturity score against an industry benchmark may indicate where a business sits relative to its peers, but it rarely explains how cyber risk could disrupt the value creation plan, impact operational performance or create financial exposure.
Lachlan George, Cyber Security Partner at BCG and European PE Cyber Expert Lead, shared his views with us on the topic. He argues that standard maturity assessments alone rarely provide investors with enough clarity to make informed decisions around valuation, investment priorities or post-acquisition cyber strategy. The real value comes from linking findings to specific value drivers, such as customer acquisition, operations, fulfilment and data monetisation, so that it is obvious which risks are commercially critical.
This distinction is critical because it fundamentally shapes the type of cyber leadership a business requires. Generic assessment processes often lead to generic CISO mandates. A diligence process grounded in business risk and value creation creates a far more strategic outcome, creating a remit aligned to the organisation’s operating model and investment priorities from day one.
The framework behind the mandate
In our whitepaper, Defining the CISO Mandate: How Do You Align Risk & Value, we outline a framework for defining cyber leadership requirements:
(Business Value Chains x Investment Thesis) : (Organisational Risks / Risk Tolerance) = CISO Remit
The principle is straightforward: strategic ambition increases exposure. Various stages & approaches within PE can affect your cyber posture. Buy-and-build strategies, geographic expansion, AI adoption & IPO readiness all introduce new operational and cyber risk considerations. Continually reassessing your position and your risk tolerance helps to define your CISO mandate and remit in that moment. The output is a CISO mandate aligned specifically to the organisation’s strategy, risk profile and value creation agenda, rather than a broad or undefined security leadership brief.
Where organisations get this wrong
The most common issue we encounter is organisations appointing cyber leadership before defining their own risk appetite and strategic priorities. Without this clarity, even highly capable CISOs are forced into reactive operational management rather than driving structured, commercially aligned security programmes. Contributors to the whitepaper consistently highlighted this challenge: without a clearly defined view of risk tolerance, prioritisation becomes significantly harder.
Timing is equally important. Bringing in a CISO too late often means retroactively designing security protocols, rather than proactively embedding security by design and resilience. Equally, introducing the role too early, before the organisation understands the remit required, can result in a lack of strategic alignment and unclear expectations.
What this means for PE investors
Cyber security is no longer simply a post-deal operational consideration. It has the potential to influence valuation, insurability and the credibility of the investment itself. The firms approaching cyber diligence through a commercial and value creation lens, and translating that into clearly defined cyber leadership mandates, will be better positioned to protect and enhance value across the portfolio.
The full framework, including investment thesis-specific CISO profiles aligned to varying strategies, is explored in the whitepaper.
