What is Cyber Risk Governance? Implementing Cyber Strategy

Cyber risk governance (also called cyber risk governance or governance, risk, and compliance — GRC) and cyber risk management are often used interchangeably, but they are actually very different parts of the way an organization achieves data protection.

While cybersecurity risk management focuses on implementing cybersecurity controls, cyber risk governance is more concerned with the strategy behind that implementation. Cyber risk governance determines accountability and ensures ongoing performance with written information security policies, procedures, and repeated assessments.

If cybersecurity is about getting the job done, cybersecurity governance is about the wider goals, making sure the organization has the necessary resources, identifying who is responsible, and seeing to it that the job doesn’t only “get done” today but on an ongoing basis, adapting to evolving needs.

Once considered an IT problem and confined to the IT department, boards of directors increasingly realize cybersecurity is an enterprise-wide issue. Cybersecurity governance is aligned with enterprise risk management to ensure that cybersecurity receives the consideration it needs and aligns with business objectives.

Cybersecurity governance, therefore, determines a business’s security posture and its attitude toward risk before developing an overall cybersecurity strategy for securing business processes throughout the organization via strong, audited cybersecurity policies and overseeing cybersecurity control implementation.

Why is Cybersecurity Risk Governance Important?

The key components of cybersecurity risk governance make it more likely that businesses will succeed when improving their security postures amidst a rapidly changing cyber threat landscape. The goal of cyber risk governance is to build cyber maturity.

Implementing security controls can have an immediate positive effect on a firm’s security posture, but sustainable change requires a long-term, high-level roadmap that gives the business direction, despite the inevitable changes in cybersecurity threats or compliance requirements of new and existing regulations.

Strong cybersecurity risk governance leads to clear, comprehensive policies that contribute to a firm’s incident response capabilities. Furthermore, following a cyber governance roadmap can help make a firm more proactive amid emerging threats, which is increasingly important considering new technologies and ongoing digital transformation.

For example, increased digitization and the rapid growth in remote working post-COVID-19 forced many businesses to adopt new technologies and expand their IT infrastructure to limit business disruption.

While much of this infrastructure remains in place, the rapidity of its creation led to new vulnerabilities that many firms are yet to remediate, including the increased use of:

  • Unsecured devices
  • Unsecured networks
  • Cloud-based services with inadequate cybersecurity policies

These are just some of how businesses are at more risk of cyber incidents that can lead to financial loss and reputational damage, including:

Key Components of a Cyber Risk Governance Program

Cybersecurity governance has five main components, key aspects that can help a business understand and implement cybersecurity governance practices that will help them achieve long-term cybersecurity goals beyond the day-to-day information security tasks, more aligned with legal issues, regulatory compliance, and the direction of the company.

Engagement at C-Level

While cyber risk management mostly concerns the on-the-ground implementation of cybersecurity controls, the cybersecurity risk governance that informs it must start at the top level of the organization.

In addition to input from the Chief Information Security Officer (CISO), an effective cybersecurity program requires engagement from board members and major stakeholders, such as the CIO, CEO, and CFO, to ensure that cybersecurity awareness spreads from senior leadership positions throughout the organization.

Developing a cybersecurity culture can take time, but a mature cybersecurity culture ensures all employees understand they are stakeholders in cybersecurity and not only engage with cybersecurity controls but are proactive in risk mitigation and remediation.

Cybersecurity training goes a long way toward reducing the risk of potentially damaging cybersecurity incidents, such as data breaches and data leaks, by filling knowledge gaps that could lead to human error and manipulation by social engineering. However, a cyber risk governance strategy that includes developing a cybersecurity culture can create a more cyber-resilient organization.

Senior leadership must be involved in cyber risk governance to ensure that cybersecurity is free from any perceived silo and that the company-wide governance plan will align with the business’s overall objectives and enterprise risk management.

Business Assessment

With senior leadership on board, the cyber risk governance plan requires continuous assessments of the organization’s business operations. Cyber risk assessments identify cybersecurity business risks and an organization’s cybersecurity gaps and vulnerabilities.

Organizations can use cybersecurity performance management practices to develop security ratings. With agreed-upon key performance indicators (KPIs), stakeholders can measure the firm’s cybersecurity capabilities clearly and objectively. This will help audit the effectiveness of future vulnerability remediation activities.

Measuring the effectiveness of cyber risk governance initiatives is essential since cyber risk governance is not about blindly implementing recommended security controls but overseeing the wider strategy behind those security controls.

KPIs and established objectives can be used to determine the effectiveness of the cyber governance strategy. According to the results, the strategy or tactics implemented to achieve it may be modified. Furthermore, objectives may be updated according to the business’s goals.

Development of Cybersecurity Policies and Objectives

Taking the time to define cybersecurity policies and objectives helps to ensure that the entire organization understands the purpose of the security controls and that they are used correctly and consistently.

The policies are not static documents but require regular updates to reflect the business’s current security posture and cyber threat landscape. This is also the stage at which the business can establish its risk appetite and consider how to maintain an appropriate level of risk tolerance.

With cybersecurity risk governance, a business does not rely on cybersecurity frameworks, such as ISO 27001 and NIST. While these are excellent cybersecurity methodologies and certifications, businesses can adapt these frameworks to meet their unique needs and incorporate them into their own security programs.

Standardization, Implementation, and Review of Processes

Standardized processes, as well as their integration into business operations, are critical. Individuals and departments that stray from procedures developed through the combined decision-making of the CISO and the rest of the C-Suite — whether knowingly or otherwise — risk introducing vulnerabilities to the network and increasing the risk of costly data breaches and cyber attacks.

Training needs to focus on standard workflows and operating procedures, to be overseen by managers to reduce the risk of errors that could affect information security. Standardized workflows are also beneficial as information security risks are easier to monitor and manage when everyone is using known, agreed information systems and processes.

More importantly, existing processes must be reviewed regularly to ensure they are updated against the latest cyber risks and continue to align with business objectives. Operating procedures must be optimized and updated so that businesses can eliminate any inefficiencies and potential for errors and oversight.

Enforcing the Cyber Risk Governance Plan

One of the key parts of cyber risk governance is its accountability framework. Somebody needs to ensure that people follow the cyber risk governance guidelines.

The cyber risk program must measure performance across departments and systems and ensure that those identified as responsible for meeting objectives are aware of the results and work with the cyber risk governance lead to achieve and enhance them.

Using automation can help organizations streamline identifying deviations from agreed-upon processes and policies. Continuous monitoring can flag inconsistencies in user behaviors, which may be traced back to inadequate implementation of policies or issues with the policies themselves.

With consistent feedback and the ability to reference established metrics, organizations can successfully monitor, review, and enforce cyber risk governance plans. Through these processes, they can improve standardization, remediate serious issues, and update their cyber risk governance roadmaps accordingly.

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