NIS2 Directive (IV): the cost of non-compliance in Cyber Security

July 8, 2025

As we've seen in previous instalments of this series on the NIS2 Directive, organisations and companies that fail to meet the established requirements will face severe financial penalties, operational restrictions, and reputational damage that could undermine—or even worsen—their position in the market.

These threats go far beyond fines: they represent existential risks to organisations.

Non-compliance leads to substantial financial penalties, scaled according to the severity of the breach and the classification of the entity involved. Fines of up to €10 million or 2% of global annual turnover apply to essential entities, and up to €7 million or 1.4% of global turnover for important entities.

Unlike many other regulations, NIS2 ties penalties to global revenue, meaning that multinational organisations could face significant financial losses. Picture a company that fails to meet requirements: a lapse in Cyber Security could result in multi-million-euro fines, significant enough to impact profit margins and erode investor confidence.

Beyond fines: enforcement measures and legal consequences

But beyond financial penalties, the directive also foresees business restrictions, professional liability risks, and even shutdowns. Regulators are not limited to imposing fines—they have the authority to suspend business operations and hold executives accountable.

Non-compliance may lead to:

Operational bans
Mandatory audits
Legal battles and lawsuits
Administrative fines
Disqualification from executive roles
Criminal liability
Civil lawsuits

Violations could even trigger forced restructurings or market exit, especially in highly regulated sectors. This underscores the fact that failing to comply can cause collateral damage, such as loss of corporate partnerships, termination of supplier contracts, and heightened scrutiny from regulators.

This reality makes it clear that Cyber Security is not just a technical issue, it is a strategic imperative that must be embedded into corporate governance. One key aspect is the responsibility of both executives and board members: they must ensure that cyber risk management is a top priority to avoid legal consequences, reputational damage, and other associated risks.

Disregarding or stepping away from Cyber Security is a professional risk for executives.

The reputational cost of a breach

The financial and legal implications are serious, but the reputational impact can be even more damaging. In today's digital economy, trust is a competitive advantage, and a public Cyber Security breach can result in:

Loss of customers who turn to competitors with stronger Cyber Security practices
Erosion of trust among suppliers and partners, potentially leading to contract cancellations and supply chain disruptions
Investor scepticism, which can drive down share prices and shake shareholder confidence

Cyber Security breaches can quickly escalate into high-profile public crises, especially when they affect a large number of customers or disrupt essential services.

The cost of rebuilding trust after a cyber incident is usually higher than the cost of early compliance with regulatory requirements.

A tougher regulatory environment

Regulatory bodies have already shown their willingness to enforce Cyber Security rules. A clear example is the GDPR, which has imposed multi-million-euro fines for data privacy and protection violations. Meanwhile, DORA is extending its scope in the financial sector.

We are seeing a similar path with NIS2: regulators are likely to be extremely strict on enforcement. In the event of non-compliance, the question is not if there will be penalties, but when they will be imposed.

Ensuring compliance and mitigating cyber risks requires a strategic and proactive approach. Organisations must treat Cyber Security as a top-level priority, fully integrating it into their overall business strategy.

This demands an integrated, cross-functional, and holistic mindset:

No one should be left out of our digital strategies, people are at the centre.

■ Engagement across all areas of the organisation is essential to drive compliance initiatives, allocate resources, and promote a security-first culture.

Robust governance as a lever for resilience

Without solid governance (which we know can be challenging but also requires the right mindset to enable transformation and drive change) Cyber Security efforts and synergies may become fragmented, leaving organisations vulnerable to both fines and cyberattacks.

The urgency to comply with NIS2 has never been greater. Beyond financial repercussions, last-minute audits and security reviews can disrupt operations and weaken competitive positioning.

On the other hand, organisations that develop proactive capabilities in Cyber Security and compliance, with a focus on prevention and anticipation, will gain a strategic and competitive advantage by demonstrating resilience and reliability in the market.

Cyber Security as a strategic asset

Today, Cyber Security governance is a fundamental responsibility of the C-suite. From corporate governance (including boards of directors), investment in digital capabilities must be prioritised as a core element of risk management strategies.

Embedding compliance into everyday operations strengthens the security posture, boosts stakeholder trust, and ensures long-term business sustainability.

Compliance is no longer just about avoiding fines: it represents a key opportunity to build resilient, competitive organisations in a digital world. Those who treat Cyber Security as a strategic asset won’t just meet regulatory requirements—they will position themselves as leaders in security and trust.

Ignoring compliance is no longer an option.

■ Organisations must act now to secure their future, mitigate cyber risks, and drive adaptive, sustainable growth in an increasingly complex and demanding digital environment.

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