The Boardroom Case for Penetration Testing
Cybersecurity risk is no longer an abstract concern relegated to IT teams, it is a material business risk that boards and senior leaders must actively manage.
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Cybersecurity risk is no longer an abstract concern relegated to IT teams, it is a material business risk that boards and senior leaders must actively manage.UK government research indicates that around 43% of businesses experienced a cyber security breach or attack in the past year, underlining how common these incidents have become across sector, from small business to large enterprises.
The financial impact of these incidents is substantial. Insurance-market analysis suggests that cyber-attacks have contributed to approximately £44 billion in lost revenue across UK businesses over the past five years, with more than half of private-sector organisations experiencing at least one attack during that period. Independent analysis based on IBM’s Cost of a Data Breach Report 2025 indicates that the average cost of a data breach in the UK was around £3.29 million, reflecting not only the expense of technical remediation, but also wider disruption to operations, recovery efforts, and lost business.
In this environment, penetration testing should be understood as a tool for informed decision-making rather than a technical formality. By testing systems and processes against realistic attack scenarios, organisations gain clearer visibility of where controls fail, and which risks carry the greatest potential business impact. For boards, this insight is critical as it supports more effective prioritisation of security investment, strengthens oversight, and demonstrates a proactive approach to managing cyber risk before it escalates into a business-disrupting incident.
Insurers need evidence of penetration testing
Cyber insurance has become an important component of organisational risk management, but insurers increasingly expect evidence that cyber risk is being actively assessed. During underwriting and renewal, insurers and brokers often request recent penetration testing reports to demonstrate that security controls have been independently tested and that material weaknesses are understood. In practice, the presence or absence of this assurance can directly influence coverage terms, exclusions, and pricing.
The commercial implications of cyber risk are already evident. In sectors that have experienced high-profile incidents, such as retail, insurance premiums have reportedly risen by up to 10%, reflecting how real-world breaches influence insurers’ perception of exposure and loss. This demonstrates that cyber security decisions can have direct financial consequences beyond the immediate cost of an incident.
At the same time, many boards overestimate the level of protection that insurance alone provides. Official UK data shows that fewer than half of businesses report having any form of cyber insurance, and most of this cover is embedded in broader business policies rather than dedicated standalone products – with fewer than one in ten UK businesses holding a specific cyber insurance policy. These gaps in coverage mean that risk transfer may be incomplete, exposing organisations to unexpected costs when incidents occur. In this context, penetration testing plays a critical role in supporting informed risk-transfer decisions, helping organisations demonstrate maturity to insurers while reducing reliance on insurance as the primary mechanism for managing cyber risk.
Pentesting unearths IT wastage and spending priorities
Cybersecurity budgets continue to grow, yet many organisations still experience incidents despite having a wide range of tools and controls in place. In many cases, the challenge is not a lack of investment, but a lack of clarity around where that investment is genuinely reducing risk. Penetration testing helps address this by highlighting where security effort and spend may be misaligned with real-world threats.
Through realistic testing, organisations can identify where optimisations can be made to improve the coverage of security tools and controls, often without incurring significant additional spend. This insight allows security leaders and boards to move away from reactive, isolated spending and instead focus on the areas where weaknesses are most likely to be exploited.
Crucially, penetration testing supports discovery and more informed prioritisation. Rather than spreading budget thinly across marginal improvements or following the latest trends in security technologies, organisations can redirect resources toward higher-risk areas such as cloud environments, exposed APIs, and internal access pathways that are commonly targeted during real attacks. This targeted approach improves overall resilience without requiring continuous increases in spend.
Given how frequently organisations with “baseline” security controls still suffer breaches, the ability to spend wisely is increasingly important. Penetration testing provides the evidence needed to make informed trade-offs, ensuring that security investment delivers measurable risk reduction rather than the appearance of coverage.
Pentests offer assurance, ownership and accountability
As cyber incidents become more frequent and more visible, boards are increasingly expected to account for how cyber risk has been assessed and managed before an incident occurs. Following a breach, questions often extend beyond what happened technically to whether appropriate assurance activities were in place, including whether systems and processes had been tested against realistic attack scenarios, and whether known risks were understood at senior levels.
In this context, penetration testing provides tangible evidence of due diligence. Well-scoped testing programmes allow organisations to demonstrate that cyber risk has been actively examined, rather than assumed, and that weaknesses have been identified through independent assessment. This is particularly important when engaging with auditors, regulators, insurers, or other stakeholders, where boards may be required to clearly evidence governance decisions and demonstrate that cyber risk forms part of ongoing oversight rather than reactive response.
Where such assurance is absent, boards may find it harder to evidence effective governance. Given how widespread cyber-attacks have become, boards that cannot demonstrate structured testing and assurance may face increased challenges around oversight, decision-making, and whether reasonable steps were taken to manage cyber risk.
Penetration tests improve operational resilience
As cyber-attacks continue to increase in both frequency and variety, their impact is felt well beyond immediate technical disruption. Incidents frequently result in lost productivity, extended downtime, and diversion of internal resources, often consuming thousands of business hours before normal operations are restored. Across the UK economy, cyber incidents have contributed to significant cumulative losses in recent years, reinforcing that operational disruption is a central consequence of cyber risk, not a secondary one.
Penetration testing supports operational resilience by identifying weaknesses before they are exposed under real attack conditions. By testing systems, processes, and dependencies in a controlled manner, organisations gain early visibility of failure points that could otherwise escalate into outages, service degradation, or prolonged recovery efforts. This insight enables more effective planning around incident response, disaster recovery, and business continuity, helping organisations reduce the scale and duration of disruption when incidents occur.
As infrastructure continues to evolve, maintaining this relevance is critical. Modern environments increasingly rely on cloud platforms, exposed APIs, and hybrid architectures, each introducing new dependencies and potential points of failure. Penetration testing that accounts for these areas helps ensure that resilience planning reflects how systems are designed and operated, supporting uptime, continuity, and confidence as services evolve.
Supply chain and customer assurance necessitates pentesting
Cyber risk increasingly shapes how businesses are assessed by customers, partners, and suppliers. Enterprise clients now routinely expect evidence of robust cyber assurance as part of procurement and due-diligence processes. Where organisations are unable to demonstrate that systems have been independently tested, security concerns can delay decisions, introduce contractual friction, or in some cases prevent opportunities from progressing altogether.
In this context, regular and well-scoped penetration testing provides more than internal assurance. Clear testing evidence allows organisations to respond confidently to security questionnaires, supplier reviews, and client audits, demonstrating that cyber risk is being actively managed rather than addressed reactively. Over time, this can help organisations progress more smoothly through procurement and due-diligence processes by demonstrating maturity, transparency, and a practical approach to managing cyber risk.
This is particularly relevant given that many organisations remain underinsured or only partially insured against cyber risk. Strong cyber assurance delivers value beyond risk mitigation. By building trust, supporting commercial relationships, and reducing friction during procurement and onboarding, penetration testing helps organisations protect not only their systems, but also their ability to operate and grow in environments where security assurance is increasingly expected by customers and partners.
Justifying the cost of penetration testing
The cost of a cyber breach is high, encompassing not only direct financial loss but also operational disruption, recovery effort, and reputational damage. In comparison, the cost of prevention through well-designed, regular penetration testing is typically far lower than the potential impact of a serious incident. This presents a clear risk-management trade-off rather than a discretionary security expense.
Beyond prevention, penetration testing delivers value across multiple areas of the organisation. It informs insurance decisions, supports more effective use of security budgets, strengthens board oversight, improves operational resilience, and provides credible assurance to customers and partners. This breadth of impact reflects the role penetration testing plays beyond identifying technical weaknesses.
In today’s threat landscape, penetration testing should be viewed as a foundational element of security and risk management. When approached as a regular, well-scoped activity, it provides the insight and assurance needed to support sound decision-making, protect the organisation, and sustain commercial confidence over the long term.
How can Sentrium help?
At Sentrium, we help organisations design proactive penetration tests that deliver real-world value. By quantifying vulnerabilities, identifying risk reduction opportunities, IT and security spend savings, and supporting compliance objectives, we enable organisations to connect cyber security spend directly to business outcomes.
Ready to understand the value of penetration testing for your organisation? Complete our pentest scoping form or get in touch, and a member of our team will follow up promptly.
The post The Boardroom Case for Penetration Testing appeared first on Sentrium Security.
*** This is a Security Bloggers Network syndicated blog from Cyber security insights & penetration testing advice authored by Theklis Stefani. Read the original post at: https://www.sentrium.co.uk/insights/the-boardroom-case-for-penetration-testing
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