Security Program and Policies: Governance and Risk Management

This chapter is from the book

Security Program and Policies: Principles and Practices, 2nd Edition

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This chapter is from the book

This chapter is from the book 

Security Program and Policies: Principles and Practices, 2nd Edition

Learn More Buy

Summary

Information security is not an end unto itself. Information security is a business discipline that exists to support business objectives, add value, and maintain compliance with externally imposed requirements. This type of relationship is known as strategic alignment. Organizational commitment to information security practices should be codified in a written policy. The information security policy is an authoritative document that informs decision making and practices. As such, it should be authorized by the Board of Directors or equivalent body. Derivative documents for specific audiences should be published and distributed. This includes an Acceptable Use Policy and Agreement for users, a third-party version for vendors and service providers, and a synopsis for business partners and clients.

It is essential that information security policies remain relevant and accurate. At a minimum, policies should be reviewed and reauthorized annually. Change drivers are events that modify how a company operates and are a trigger for policy review. Compliance with policy requirements should be assessed and reported to executive management.

An information security audit is a systematic evidence-based evaluation of how well the organization conforms to established criteria. Audits are generally conducted by independent auditors, which implies that the auditor is not responsible for, benefited from, or in any way influenced by the audit target. A capability maturity model (CMM) assessment is an evaluation of process maturity for a given area. In contrast to an audit, the application of a CMM is generally an internal process. Audits and maturity models are good indicators of policy acceptance and integration.

Governance is the process of managing, directing, controlling, and influencing organizational decisions, actions, and behaviors. The Board of Directors is the authoritative policy making body. Executive management is tasked with providing support and resources. Endorsed by the Board of Directors and executive management, the CISO (or equivalent role) is vested with information security program management responsibility and accountability. The chain of command for the CISO should be devoid of conflict of interest. The CISO should have the authority to communicate directly with the Board of Directors.

Discussion, debate, and thoughtful deliberation result in good decision making. Supporting the CISO should be an Information Security Steering Committee, whose members represent a cross-section of the organization. The steering committee serves in an advisory capacity with particular focus on the alignment of business and security objectives. Distributed throughout the organization are a variety of roles that have information security–related responsibilities. Most notably, data owners are responsible for defining protection requirements, data custodians are responsible for managing the protection mechanisms, and data users are expected to act in accordance with the organization’s requirements and to be stewards of the information in their care.

Three factors influence information security decision making and policy development: guiding principles, regulatory requirements, and risks related to achieving their business objectives. Risk is the potential of an undesirable or unfavorable outcome resulting from a given action, activity, and/or inaction. Risk tolerance is how much of the undesirable outcome the risk taker is willing to accept in exchange for the potential benefit. Risk management is the process of determining an acceptable level of risk, identifying the level of risk for a given situation, and determining if the risk should be accepted or mitigated. A risk assessment is used to calculate the level of risk. A number of publically available risk assessment methodologies are available for organizations to use and customize. Risk acceptance indicates that the organization is willing to accept the level of risk associated with a given activity or process. Risk mitigation implies that one of four actions (or a combination of actions) will be undertaken: risk reduction, risk sharing, risk transference, or risk avoidance.

Risk management, governance, and information policy are the basis of an information program. Policies related to these domains include the following policies: Information Security Policy, Information Security Policy Authorization and Oversight, CISO, Information Security Steering Committee, Information Security Risk Management Oversight, Information Security Risk Assessment, and Information Security Risk Management.

Test Your Skills

Multiple Choice Questions

1. When an information security program is said to be “strategically aligned,” this indicates that __________________.

   1. It supports business objectives
   2. It adds value
   3. It maintains compliance with regulatory requirements
   4. All of the above

2. How often should information security policies be reviewed?

   1. Once a year
   2. Only when a change needs to be made
   3. At a minimum, once a year and whenever there is a change trigger
   4. Only as required by law

3. Information security policies should be authorized by ____________.

   1. the Board of Directors (or equivalent)
   2. business unit managers
   3. legal counsel
   4. stockholders

4. Which of the following statements best describes policies?

   1. Policies are the implementation of specifications.
   2. Policies are suggested actions or recommendations.
   3. Policies are instructions.
   4. Policies are the directives that codify organizational requirements.

5. Which of the following statements best represents the most compelling reason to have an employee version of the comprehensive information security policy?

   1. Sections of the comprehensive policy may not be applicable to all employees.
   2. The comprehensive policy may include unknown acronyms.
   3. The comprehensive document may contain confidential information.
   4. The more understandable and relevant a policy is, the more likely users will positively respond to it.

6. Which of the following is a common element of all federal information security regulations?

   1. Covered entities must have a written information security policy.
   2. Covered entities must use federally mandated technology.
   3. Covered entities must self-report compliance.
   4. Covered entities must notify law enforcement if there is a policy violation.

7. Organizations that choose to adopt the ISO 27002:2103 framework must ________________.

   1. use every policy, standard, and guideline recommended
   2. create policies for every security domain
   3. evaluate the applicability and customize as appropriate
   4. register with the ISO

8. Evidence-based techniques used by information security auditors include which of the following elements?

   1. Structured interviews, observation, financial analysis, and documentation sampling
   2. Structured interviews, observation, review of practices, and documentation sampling
   3. Structured interviews, customer service surveys, review of practices, and documentation sampling
   4. Casual conversations, observation, review of practices, and documentation sampling

9. Which of the following statements best describes independence in the context of auditing?

   1. The auditor is not an employee of the company.
   2. The auditor is certified to conduct audits.
   3. The auditor is not responsible for, benefited from, or in any way influenced by the audit target.
   4. Each auditor presents his or her own opinion.

10. Which of the following states is not included in a CMM?

    1. Average
    2. Optimized
    3. Ad hoc
    4. Managed

11. Which of the following activities is not considered a governance activity?

    1. Managing
    2. Influencing
    3. Evaluating
    4. Purchasing

12. To avoid conflict of interest, the CISO could report to which of the following individuals?

    1. The Chief Information Officer (CIO)
    2. The Chief Technology Officer (CTO)
    3. The Chief Financial Officer (CFO)
    4. The Chief Compliance Officer (CCO)

13. Which of the following statements best describes the role of the Information Security Steering Committee?

    1. The committee authorizes policy.
    2. The committee serves in an advisory capacity.
    3. The committee approves the InfoSec budget.
    4. None of the above.

14. Defining protection requirements is the responsibility of ____________.

    1. the ISO
    2. the data custodian
    3. data owners
    4. the Compliance Officer

15. Designating an individual or team to coordinate or manage information security is required by _________.

    1. GLBA
    2. MA CMR 17 301
    3. PCI DSS
    4. All of the above

16. Which of the following terms best describes the potential of an undesirable or unfavorable outcome resulting from a given action, activity, and/or inaction?

    1. Threat
    2. Risk
    3. Vulnerability
    4. Impact

17. Inherent risk is the state before __________________.

    1. an assessment has been conducted
    2. security measures have been implemented
    3. the risk has been accepted
    4. None of the above

18. Which of the following terms best describes the natural, environmental, or human event or situation that has the potential for causing undesirable consequences or impact?

    1. Risk
    2. Threat source
    3. Threat
    4. Vulnerability

19. Which of the following terms best describes a disgruntled employee with intent to do harm?

    1. Risk
    2. Threat source
    3. Threat
    4. Vulnerability

20. Which if the following activities is not considered an element of risk management?

    1. The process of determining an acceptable level of risk
    2. Assessing the current level of risk for a given situation
    3. Accepting the risk
    4. Installing risk-mitigation safeguards

21. How much of the undesirable outcome the risk taker is willing to accept in exchange for the potential benefit is known as _________.

    1. risk acceptance
    2. risk tolerance
    3. risk mitigation
    4. risk avoidance

22. Which of the following statements best describes a vulnerability?

    1. A vulnerability is a weakness that could be exploited by a threat source.
    2. A vulnerability is a weakness that can never be fixed.
    3. A vulnerability is a weakness that can only be identified by testing.
    4. A vulnerability is a weakness that must be addressed regardless of the cost.

23. A control is a security measure that is designed to _______ a threat source.

    1. detect
    2. deter
    3. prevent
    4. All of the above

24. Which of the following is not a risk-mitigation action?

    1. Risk acceptance
    2. Risk sharing or transference
    3. Risk reduction
    4. Risk avoidance

25. Which of the following risks is best described as the expression of (the likelihood of occurrence after controls are applied) × (expected loss)?

    1. Inherent risk
    2. Expected risk
    3. Residual risk
    4. Accepted risk

26. Which of the following risk types best describes an example of insurance?

    1. Risk avoidance
    2. Risk transfer
    3. Risk acknowledgement
    4. Risk acceptance

27. Which of the following risk types relates to negative public opinion?

    1. Operational risk
    2. Financial risk
    3. Reputation risk
    4. Strategic risk

28. Compliance risk as it relates to federal and state regulations can never be ____________.

    1. avoided
    2. transferred
    3. accepted
    4. None of the above

29. Which of the following statements best describes organizations that are required to comply with multiple federal and state regulations?

    1. They must have different policies for each regulation.
    2. They must have multiple ISOs.
    3. They must ensure that their information security program includes all applicable requirements.
    4. They must choose the one regulation that takes precedence.

30. Which of the following terms best describes “duty of care” as applied to corporate directors and executive officers?

    1. It’s a legal obligation.
    2. It’s an outdated requirement.
    3. It’s ignored by most organizations.
    4. It’s a factor only when there is a loss greater than $1,000.

Exercises

Exercise 4.1 Understanding ISO 27002:2005

The introduction to ISO 27002:2005 includes this statement: “This International Standard may be regarded as a starting point for developing organization-specific guidelines. Not all of the controls and guidance in this code of practice may be applicable. Furthermore, additional controls and guidelines not included in this standard may be required.”

1. Explain how this statement relates to the concept of strategic alignment.
2. The risk assessment domain was included in the ISO 27002:2005 edition and then removed in ISO 27002:2013. Why do you think they made this change?
3. What are the major topics of ISO 27005?

Exercise 4.2 Understanding Policy Development and Authorization

Three entrepreneurs got together and created a website design hosting company. They will be creating websites and social media sites for their customers, from simple “Hello World” pages to full-fledged e-commerce solutions. One entrepreneur is the technical guru, the second is the marketing genius, and the third is in charge of finances. They are equal partners. The entrepreneurs also have five web developers working for them as independent contractors on a per-project basis. Customers are requesting a copy of their security policies.

1. Explain the criteria they should use to develop their policies. Who should authorize the policies?
2. Should the policies apply to the independent contractors? Why or why not?
3. What type of documentation should they provide their customers?

Exercise 4.3 Understanding Information Security Officers

1. ISOs are in high demand. Using online job hunting sites (such as Monster.com, Dice.com, and TheLadders.com), research available positions in your geographic area.
2. Is there a common theme in the job descriptions?
3. What type of certifications, education, and experience are employers seeking?

Exercise 4.4 Understanding Risk Terms and Definitions

1. Define each of the following terms: inherent risk, threat, threat source, vulnerability, likelihood, impact, and residual risk.
2. Provide examples of security measures designed to (a) deter a threat source, (b) prevent a threat source from being successful, and (c) detect a threat source.
3. Explain risk avoidance and why that option is generally not chosen.

Exercise 4.5: Understanding Insurance

1. What is cyber-insurance and what does it generally cover?
2. Why would an organization purchase cyber-insurance?
3. What is the difference between first-party coverage and third-party coverage?

Projects

Project 4.1: Analyzing a Written Policy

1. Many organizations rely on institutional knowledge rather than written policy. Why do you think all major information security regulations require a written information security policy? Do you agree? Explain your opinion.

2. We are going to test the conventional wisdom that policy should be documented conducting an experiment.

   1. Write down or print out these three simple policy statements. Or, if you would prefer, create your own policy statements.

      The Board of Directors must authorize the Information Security Policy.

      An annual review of the Information Security Policy must be conducted.

      The CISO is responsible for managing the review process.

   2. Enlist four subjects for your experiment.

      Give two of the subjects the written policy. Ask them to read document. Have them keep the paper.

      Read the policy to the two other subjects. Do not give them a written copy.

   3. Within 24 hours, contact each subject and ask them to recall as much of the policy as possible. If they ask, let the first two subjects know that they can consult the document you gave them. Document your findings. Does the outcome support your answer to Question 1?

Project 4.2: Analyzing Information Security Management

1. Does your school or workplace have a CISO or an equivalent position? Who does the CISO (or equivalent) report to? Does he or she have any direct reports? Is this person viewed as a security champion? Is he or she accessible to the user community?
2. It is important that CISOs stay current with security best practices, regulations, and peer experiences. Research and recommend (at least three) networking and educational resources.
3. If you were tasked with selecting an Information Security Steering Committee at your school or workplace to advise the CISO (or equivalent), who would you choose and why?

Project 4.3: Using Risk Assessment Methodologies

The three most well-known information security risk assessment methodologies are OCTAVE (Operationally Critical Threat, Asset, and Vulnerability Evaluation, developed at the CERT Coordination Center at Carnegie Mellon University), FAIR (Factor Analysis of Information Risk), and the NIST Risk Management Framework (RMF).

1. Research and write a description of each (including pros and cons).
2. Are they in the public domain, or is there a licensing cost?
3. Is training available?