Good morning. If you thought the Crowdstrike debacle—which knocked out a good portion of the world’s computers—was bad, wait for Q-day. That’s the term techies use to describe the day when quantum computing will break all modern encryption systems, and while it won’t arrive for years or even decades, CFOs should be mentally prepared.
Governments, businesses, and academics have been preparing for this for a long time, developing quantum-resistant cybersecurity offerings, but there’s no silver bullet.
And, as we saw with Crowdstrike’s botched update that led to billions in losses for companies worldwide, it’s not just cybersecurity hacks that can cause problems, but also updates and transitions to new cybersecurity systems.
That means migrating to new quantum-resistant cybersecurity systems is in itself a serious business risk. But don’t take it from me, take it from one of the world’s top quantum computing researchers, Michele Mosca, a professor in the Department of Combinatorics & Optimization at the University of Waterloo, and the cofounder of the Institute for Quantum Computing.
Mosca—who developed Mosca’s theorem, which describes when the world needs to become quantum-resistant—told me that the risk of Q-day coming within the next five years is just 5%, but jumps to 30% over the next 10 years. And the professor had a message for executives who might brush off the cybersecurity threat from quantum computers, or resist transitioning to quantum-resistant security systems due to costs.
“It’s a material risk,” he said. “You can’t say, ‘Hey, it’s probably not going to happen in 10 years, it’s only a 30% chance.’ Please report that to your board, your auditor, your regulator, your customers: ‘There’s only a little over a one-in-four chance that our solutions will systematically fail indefinitely, because we didn’t prepare.’ That’s not something you’re going to want to say.”
“For some reason we’ve gotten away with pretending that this risk isn’t there. But those days are quickly coming to an end,” he added.
For CFOs, a good way to think of it is to realize you all have technical debt—a catchall term used to describe the implied cost of the required reworking of technological systems—on your books, and some of you are ignoring it. According to Mosca, the migration process from old cybersecurity systems to new quantum-resistant ones will take years, the right talent, and billions of dollars—and that future spending is a form of debt that is growing.
“It’s fine to have debt as long as you know you have it, and you realize you’re paying interest, and you know you’re gonna have to somehow pay it back,” Mosca said. “It’s not fine to pretend it’s not there.”
CFOs will play an important role in recognizing the potential costs associated with the transition to quantum-resistant cybersecurity, he argued. That also makes CFOs key allies in addressing those potential issues now before they get out of hand.
“CFOs…have important work to do to help make market forces work for us instead of against us,” he said.
Like any revolutionary technology, quantum computing holds a world of possibilities and risks. With that in mind, Mosca had a message for the world’s business leaders, which I will quote at length:
“For quantum to be a positive milestone in human history or not, it’s your choice,” he said. “I’m working hard, fighting hard, along with many others to make sure we collectively take the ‘yes’ path, we are going to make it a positive event in human history. But there’s still a lot of real leadership that needs to be shown across the business world and political world. I know we’re very skeptical and cynical at times, but we do see, from time to time, these leaders step up and really change the world into a more positive direction.”
Will Daniel
Will.Daniel@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
Leaderboard
Lucy To was named CFO of SAB Biotherapeutics (Nasdaq: SABS), effective Aug. 12. She will succeed former CFO Michael King, who left the company in June to accept a role as CEO of a private oncology company. Prior to joining SAB, To was a managing director in Wells Fargo’s healthcare investment banking group and also had stints at Deutsche Bank, Intercept Pharmaceuticals, and Citigroup.
Brian J. Bertaux was appointed CFO of Hudson Technologies (Nasdaq: HDSN), a refrigerant services company, effective immediately. He succeeds Nat Krishnamurti, who is leaving the company to pursue other endeavors, the company said. Bertaux arrives from Brown Haven Homes, a designer and builder of custom homes in the Southeastern United States, where he was CFO. He previously spent 20 years at Trex, a manufacturer of composite decking and railing.
Ginger Smith was promoted to interim CEO of Alpine 4 Holdings (NasdaqCM:ALPP), a North American industrial conglomerate. She will succeed Christopher Meinerz, who notified the company he intends to resign on or before Aug. 30. Smith, currently the company’s corporate controller, has over 35 years of accounting and management experience.
Peter Hurter was reappointed to the board as group CFO of Crimson Tide (AIM: TIDE), a software services provider in the U.K., U.S., and Ireland, effective immediately. He succeeds Shaun Mullen, who stepped down from the board and will remain with the group until Aug. 31. Hurter previously served as group CFO from 2018 to 2023 and has been the company’s COO in a non-board capacity since June.
Tim Foote was promoted to chief financial officer of Blackberry (NYSE: BB), effective immediately. He succeeds Steve Rai, who has been CFO since 2019 and is leaving to pursue other opportunities outside the company, Blackberry said. Foote joined Blackberry following the Canadian company’s acquisition of Good Technology in 2015 and most recently served as CFO of the cybersecurity division.
Brad Tade was promoted to chief financial officer and treasurer of ADMA Biologics (Nasdaq: ADMA), a biopharmaceutical company, effective immediately. The move comes five months after the company announced former CFO Brian Lenz would transition to a consulting role. Tade joined ADMA last June as vice president of financial operations and has over twenty years of experience in the medical device and pharmaceutical industries.
Julie Haase was promoted to chief financial officer of Liberty Mutual Insurance, effective Jan. 1. She will succeed Chris Peirce, who is retiring at the end of 2024 after nearly three decades at Liberty Mutual. Haase started her career with the group’s corporate and personal finance organizations and was named CFO of the latter in 2014. Currently the chief operating officer at the insurance company, Haase has also helped lead Liberty’s resource group for women and allies since 2015.
Jennifer DiRico was named chief financial officer of data protection and management company Commvault (Nasdaq: CVLT), effective Aug. 12. She succeeds Gary Merrill, who is becoming the company’s first chief commercial officer after nearly 19 years at Commvault and almost three as CFO. DiRico comes from Toast, a cloud-based software management company for restaurants, where she served as a senior vice president and led the company’s IPO.
Big Deal
Spending on corporate travel could reach and even surpass pre-pandemic levels by the end of the year, according to Deloitte’s 2024 corporate travel study. Over 70% of travel managers surveyed expected their companies to spend more on travel this year, with 58% also projecting an increase in 2025.
Industry gatherings are helping spur this growth. Over 63% of business travelers said they expected to travel for a conference in 2024, significantly ahead of all other travel types. Fifty-one percent of those who help oversee travel budgets said their teams are traveling more often, with conferences and in-person client meetings cited as the two biggest causes.
Going deeper
Here are a few Fortune weekend reads:
“Meta, Microsoft, and Google blew blinding amounts of AI smoke during earnings—here’s what we actually learned” by Alexei Oreskovic
“Who is Polymarket CEO Shayne Coplan? The 26-year-old’s crypto betting site is taking U.S. politics by storm” by Jeff John Roberts and Niamh Rowe
“Inside Volkswagen’s $130 billion EV battle” by Vivienne Walt
“Trump tried to sway the Fed and now Powell is fighting back” by Eleanor Pringle
Overheard
“A completely homogeneous team risks becoming an echo chamber of limited, like-minded ideas, which will, at best, stifle innovation. At worst, the scarcity of different perspectives can lead to offensive, inappropriate, or outright incorrect solutions, undermining the power technology has to connect us.”
— Heather Shoemaker, the founder and CEO of Language I/O, writes in a Fortune opinion piece titled, “Diversity and inclusion help us expose AI chatbot biases—which pose a risk to my real-time translation startup.”
