Third-Party Governance
Third-party governance refers to the system of external oversight required by law, regulation, industry standards, contractual obligations, or licensing requirements. The governance process typically involves external investigators or auditors who assess the target organization’s compliance with security requirements. These auditors may be appointed by a governing body or hired by the organization itself.
Another critical aspect of third-party governance involves the security oversight of third parties that an organization relies on. Many organizations outsource operations such as security, maintenance, technical support, or accounting services. It is crucial that these third parties comply with the primary organization’s security policies to avoid introducing additional risks and vulnerabilities.
Key Focus of Third-Party Governance
The main objective of third-party governance is to ensure compliance with security objectives, regulations, and contractual obligations. This often involves on-site assessments, which allow firsthand observation of the security measures implemented by the third party.
Auditors and assessors follow specific protocols, such as Control Objectives for Information and Related Technology (COBIT), and use a checklist of requirements to guide their investigation. This process is critical to ensuring that third parties uphold the primary organization’s security stance.
Documentation Review in Third-Party Governance
Documentation review is a fundamental part of third-party governance. It involves verifying exchanged documentation against standards and expectations before any on-site inspections. If the documentation meets the necessary requirements, the on-site review can focus on assessing compliance. However, if the documentation is insufficient or incomplete, the on-site review is delayed until all issues are resolved.
In cases involving government or military agencies, failure to provide adequate documentation can result in the loss or voiding of authorization to operate (ATO). Sufficient documentation may help maintain an ATO or secure a temporary ATO (TATO). If an ATO is revoked, a complete review of both documentation and on-site compliance is required to restore it.
The Importance of Process and Policy Review
An essential part of third-party governance is the process and policy review, which examines business processes and organizational policies against established standards and contractual obligations. The review ensures that business tasks, systems, and methodologies are practical, efficient, and aligned with security goals.
Risk management and assessment are integral parts of this review. The process focuses on reducing vulnerabilities and mitigating risks to ensure a secure and compliant operating environment.
