The Cyber Governance Health Check looks at the approach the UK's FTSE 350 companies take towards cyber security and the 2018 report published on Tuesday, showed that less than 16% of boards had a comprehensive understanding of the impact of a cyber attack.
This is despite 96% having a cyber security strategy in place and even more worryingly, only around half of those test their plans on a regular basis.
"The UK is home to world-leading businesses but the threat of cyber attacks is never far away," said Digital Minister Margot James. "We know that companies are well aware of the risks, but more needs to be done by boards to make sure that they don't fall victim to a cyber attack."
There are some positives with awareness of cyber attacks increasing year-on-year; almost three-quarters of respondents, 72%, acknowledge the risk of cyber threats is high, up from 54% in 2017.
The report said this is largely down to the introduction of the General Data Protection Regulations (GDPR), which has had a positive effect in increasing the attention that boards are giving cyber threats. In 2018, 77% of those responding to last years health check said that board discussion and management of cyber security had increased since GDPR came into force in May 2018.
"Boards need to recognise that they have a responsibility to drive changes to business and IT operating models to enable their organisations to be securable," Richard Horne, cyber security partner at PwC.
"Managing cyber risk is about far more than just building security controls, and requires board-driven business change. At PwC, we work with a variety of organisations and there's always a noticeable difference in those who have a strong understanding of cyber risk at board level."