IT risk becoming corporate governance issue, says Gartner

Boards paying more attention to IT risk, reporting outside of the IT function

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IT risk becoming corporate governance issue, says Gartner Organisations increasingly recognise that security must be managed as a business risk issue, says Scholtz.
By  Mark Sutton Published  September 20, 2015

IT risk is increasingly treated as corporate governance issue, according to a new survey by Gartner.

The survey of large companies found that in 71% of organisations, IT risk management data influences decisions at a board level. In 38% of the responding companies, the most senior person responsible for information security reports outside of the IT organisation.

Gartner surveyed 964 respondents in large organizations - with at least $50 million equivalent in total annual revenue for fiscal year 2014, and with a minimum of 100 employees - in seven countries between February and April 2015.

"Increasing awareness of the impact of digital business risks, coupled with high levels of publicity regarding cybersecurity incidents, are making IT risk a board-level issue," said Tom Scholtz, vice president and Gartner Fellow. "Seventy-one percent of respondents indicated that IT risk management data influences decisions at a board level. This also reflects an increasing focus on dealing with IT risk as a part of corporate governance."

The nature of the reporting lines of the information security team is one of the key attributes of effective governance. Thirty-eight percent of the survey respondents indicated explicitly that the most senior person responsible for information security reports outside of the IT organisation.

"The primary reasons for establishing this reporting line outside of IT are to improve separation between execution and oversight, to increase the corporate profile of the information security function and to break the mindset among employees and stakeholders that "security is an IT problem," said Scholtz. Organisations increasingly recognise that security must be managed as a business risk issue, and not just as an operational IT issue. There is an increasing understanding that cybersecurity challenges go beyond the traditional realm of IT into areas such as operational technology (OT) and Internet of Things (IoT) security."

The seniority level from which security programs are sponsored is also improving. Sixty-three percent of the respondents indicated that they receive sponsorship and support for their information security programs from leadership outside of the IT organisation. This is a significant increase from 54% in 2014. CEO and/or board-level sponsorship has remained constant at 30% (29% in 2014) while sponsorship from a steering committee increased from 7% to 12%. There are interesting regional differences, with 57% of respondents in North America indicating sponsorship from outside IT, considerably lower than 63% in Western Europe and 67% in Asia/Pacific.

"A senior executive mandate for the security program is fundamental. Without it, the security program has little chance of getting the requisite support from the rest of the organisation," said Scholtz. "Because a corporate information security steering committee (CISSC) should consist primarily of business representatives, we expect that the level of sponsorship from such bodies will continue to increase as governance functions continue to mature. Indeed, an effective governance forum, such as the CISSC, becomes the authoritative representative of the CEO, the board and the senior business unit managers."

On the effectiveness of security policies, although half of the respondents indicate the governance body is involved in assessing and approving the policies, only 30% of respondents indicated that the business units (BUs) are actively involved in developing the policies that will affect their businesses. While this is a considerable improvement from previous years (16% in 2014), it still indicates a lack of active engagement with the business. This lack of engagement is a major cause of different risk views between the security team and the business, which can result in redundant and mismanaged controls, which in turn result in unnecessary audit findings and ultimately in reduced productivity.

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