A comprehensive treatment of the topic of risk management is beyond the scope of this article. However, a useful definition of risk management will be provided as well as some basic terminology and a commonly used process for risk management.
The CISA Review Manual 2006 provides the following definition of risk management: "Risk management is the process of identifying vulnerabilities and threats to the information resources used by an organization in achieving business objectives, and deciding what countermeasures, if any, to take in reducing risk to an acceptable level, based on the value of the information resource to the organization."[5]
There are two things in this definition that may need some clarification. First, the process of risk management is an ongoing iterative process. It must be repeated indefinitely. The business environment is constantly changing and new threats and vulnerability emerge every day. Second, the choice of countermeasures (controls) used to manage risks must strike a balance between productivity, cost, effectiveness of the countermeasure, and the value of the informational asset being protected.
Risk is the likelihood that something bad will happen that causes harm to an informational asset (or the loss of the asset). A vulnerability is a weakness that could be used to endanger or cause harm to an informational asset. A threat is anything (man made or act of nature) that has the potential to cause harm.
The likelihood that a threat will use a vulnerability to cause harm creates a risk. When a threat does use a vulnerability to inflict harm, it has an impact. In the context of information security, the impact is a loss of availability, integrity, and confidentiality, and possibly other losses (lost income, loss of life, loss of real property). It should be pointed out that it is not possible to identify all risks, nor is it possible to eliminate all risk. The remaining risk is called residual risk.
A risk assessment is carried out by a team of people who have knowledge of specific areas of the business. Membership of the team may vary over time as different parts of the business are assessed. The assessment may use a subjective qualitative analysis based on informed opinion, or where reliable dollar figures and historical information is available, the analysis may use quantitative analysis.
The research has shown that the most vulnerable point in most information systems is the human user, operator, designer, or other human[6] The ISO/IEC 27002:2005 Code of practice for information security management recommends the following be examined during a risk assessment:
- organization of information security,
- human resources security,
- physical and environmental security,
- communications and operations management,
- information systems acquisition, development and maintenance,
- information security incident management,
- business continuity management, and
- regulatory compliance.
In broad terms, the risk management process consists of:
- Identification of assets and estimating their value. Include: people, buildings, hardware, software, data (electronic, print, other), supplies.
- Conduct a threat assessment. Include: Acts of nature, acts of war, accidents, malicious acts originating from inside or outside the organization.
- Conduct a vulnerability assessment, and for each vulnerability, calculate the probability that it will be exploited. Evaluate policies, procedures, standards, training, physical security, quality control, technical security.
- Calculate the impact that each threat would have on each asset. Use qualitative analysis or quantitative analysis.
- Identify, select and implement appropriate controls. Provide a proportional response. Consider productivity, cost effectiveness, and value of the asset.
- Evaluate the effectiveness of the control measures. Ensure the controls provide the required cost effective protection without discernible loss of productivity.
For any given risk, Executive Management can choose to accept the risk based upon the relative low value of the asset, the relative low frequency of occurrence, and the relative low impact on the business. Or, leadership may choose to mitigate the risk by selecting and implementing appropriate control measures to reduce the risk. In some cases, the risk can be transferred to another business by buying insurance or out-sourcing to another business.[7] The reality of some risks may be disputed. In such cases leadership may choose to deny the risk.
[edit] Controls
Main article: security controls
When Management chooses to mitigate a risk, they will do so by implementing one or more of three different types of controls.
[edit] Administrative
Administrative controls (also called procedural controls) consist of approved written policies, procedures, standards and guidelines. Administrative controls form the framework for running the business and managing people. They inform people on how the business is to be run and how day to day operations are to be conducted. Laws and regulations created by government bodies are also a type of administrative control because they inform the business. Some industry sectors have policies, procedures, standards and guidelines that must be followed – the Payment Card Industry (PCI) Data Security Standard required by Visa and Master Card is such an example. Other examples of administrative controls include the corporate security policy, password policy, hiring policies, and disciplinary policies.
Administrative controls form the basis for the selection and implementation of logical and physical controls. Logical and physical controls are manifestations of administrative controls. Administrative controls are of paramount importance.
[edit] Logical
Logical controls (also called technical controls) use software and data to monitor and control access to information and computing systems. For example: passwords, network and host based firewalls, network intrusion detection systems, access control lists, and data encryption are logical controls.
An important logical control that is frequently overlooked is the principle of least privilege. The principle of least privilege requires that an individual, program or system process is not granted any more access privileges than are necessary to perform the task. A blatant example of the failure to adhere to the principle of least privilege is logging into Windows as user Administrator to read Email and surf the Web. Violations of this principle can also occur when an individual collects additional access privileges over time. This happens when employees' job duties change, or they are promoted to a new position, or they transfer to another department. The access privileges required by their new duties are frequently added onto their already existing access privileges which may no longer be necessary or appropriate.
[edit] Physical
Physical controls monitor and control the environment of the work place and computing facilities. They also monitor and control access to and from such facilities. For example: doors, locks, heating and air conditioning, smoke and fire alarms, fire suppression systems, cameras, barricades, fencing, security guards, cable locks, etc. Separating the network and work place into functional areas are also physical controls.
An important physical control that is frequently overlooked is the separation of duties. Separation of duties ensures that an individual can not complete a critical task by himself. For example: an employee who submits a request for reimbursement should not also be able to authorize payment or print the check. An applications programmer should not also be the server administrator or the database administrator – these roles and responsibilities must be separated from one another.[8]
[edit] Defense in depth
Information security must protect information throughout the life span of the information, from the initial creation of the information on through to the final disposal of the information. The information must be protected while in motion and while at rest. During its lifetime, information may pass through many different information processing systems and through many different parts of information processing systems. There are many different ways the information and information systems can be threatened. To fully protect the information during its lifetime, each component of the information processing system must have its own protection mechanisms. The building up, layering on and overlapping of security measures is called defense in depth. The strength of any system is no greater than its weakest link. Using a defence in depth strategy, should one defensive measure fail there are other defensive measures in place that continue to provide protection.
Recall the earlier discussion about administrative controls, logical controls, and physical controls. The three types of controls can be used to form the basis upon which to build a defense-in-depth strategy. With this approach, defense-in-depth can be conceptualized as three distinct layers or planes laid one on top of the other. Additional insight into defense-in- depth can be gained by thinking of it as forming the layers of an onion, with data at the core of the onion, people the next outer layer of the onion, and network security, host-based security and application security forming the outermost layers of the onion. Both perspectives are equally valid and each provides valuable insight into the implementation of a good defense-in-depth strategy.
[edit] Security classification for information
An important aspect of information security and risk management is recognizing the value of information and defining appropriate procedures and protection requirements for the information. Not all information is equal and so not all information requires the same degree of protection. This requires information to be assigned a security classification.
The first step in information classification is to identify a member of senior management as the owner of the particular information to be classified. Next, develop a classification policy. The policy should describe the different classification labels, define the criteria for information to be assigned a particular label, and list the required security controls for each classification.
Some factors that influence which classification information should be assigned include how much value that information has to the organization, how old the information is and whether or not the information has become obsolete. Laws and other regulatory requirements are also important considerations when classifying information.
The type of information security classification labels selected and used will depend on the nature of the organisation, with examples being:
- In the business sector, labels such as: Public, Sensitive, Private, Confidential.
- In the government sector, labels such as: Unclassified, Sensitive But Unclassified, Restricted, Confidential, Secret, Top Secret and their non-English equivalents.
- In cross-sectoral formations, the Traffic Light Protocol, which consists of: White, Green, Amber and Red.
All employees in the organization, as well as business partners, must be trained on the classification schema and understand the required security controls and handling procedures for each classification. The classification of a particular information asset has been assigned should be reviewed periodically to ensure the classification is still appropriate for the information and to ensure the security controls required by the classification are in place.
[edit] Access control
Access to protected information must be restricted to people who are authorized to access the information. The computer programs, and in many cases the computers that process the information, must also be authorized. This requires that mechanisms be in place to control the access to protected information. The sophistication of the access control mechanisms should be in parity with the value of the information being protected – the more sensitive or valuable the information the stronger the control mechanisms need to be. The foundation on which access control mechanisms are built start with identification and authentication.
Identification is an assertion of who someone is or what something is. If a person makes the statement "Hello, my name is John Doe" they are making a claim of who they are. However, their claim may or may not be true. Before John Doe can be granted access to protected information it will be necessary to verify that the person claiming to be John Doe really is John Doe.
Authentication is the act of verifying a claim of identity. When John Doe goes into a bank to make a withdrawal, he tells the bank teller he is John Doe (a claim of identity). The bank teller asks to see a photo ID, so he hands the teller his driver's license. The bank teller checks the license to make sure it has John Doe printed on it and compares the photograph on the license against the person claiming to be John Doe. If the photo and name match the person, then the teller has authenticated that John Doe is who he claimed to be.
There are three different types of information that can be used for authentication: something you know, something you have, or something you are. Examples of something you know include such things as a PIN, a password, or your mother's maiden name. Examples of something you have include a driver's license or a magnetic swipe card. Something you are refers to biometrics. Examples of biometrics include palm prints, finger prints, voice prints and retina (eye) scans. Strong authentication requires providing information from two of the three different types of authentication information. For example, something you know plus something you have. This is called two factor authentication.
On computer systems in use today, the Username is the most common form of identification and the Password is the most common form of authentication. Usernames and passwords have served their purpose but in our modern world they are no longer adequate. Usernames and passwords are slowly being replaced with more sophisticated authentication mechanisms.
After a person, program or computer has successfully been identified and authenticated then it must be determined what informational resources they are permitted to access and what actions they will be allowed to perform (run, view, create, delete, or change). This is called authorization.
Authorization to access information and other computing services begins with administrative policies and procedures. The policies prescribe what information and computing services can be accessed, by whom, and under what conditions. The access control mechanisms are then configured to enforce these policies.
Different computing systems are equipped with different kinds of access control mechanisms - some may even offer a choice of different access control mechanisms. The access control mechanism a system offers will be based upon one of three approaches to access control or it may be derived from a combination of the three approaches.
The non-discretionary approach consolidates all access control under a centralized administration. The access to information and other resources is usually based on the individuals function (role) in the organization or the tasks the individual must perform. The discretionary approach gives the creator or owner of the information resource the ability to control access to those resources. In the Mandatory access control approach, access is granted or denied basing upon the security classification assigned to the information resource.
Examples of common access control mechanisms in use today include Role-based access control available in many advanced Database Management Systems, simple file permissions provided in the UNIX and Windows operating systems, Group Policy Objects provided in Windows network systems, Kerberos, RADIUS, TACACS, and the simple access lists used in many firewalls and routers.
To be effective, policies and other security controls must be enforceable and upheld. Effective policies ensure that people are held accountable for their actions. All failed and successful authentication attempts must be logged, and all access to information must leave some type of audit trail.[citation needed]
[edit] Cryptography
Information security uses cryptography to transform usable information into a form that renders it unusable by anyone other than an authorized user; this process is called encryption. Information that has been encrypted (rendered unusable) can be transformed back into its original usable form by an authorized user, who possesses the cryptographic key, through the process of decryption. Cryptography is used in information security to protect information from unauthorized or accidental disclosure while the information is in transit (either electronically or physically) and while information is in storage.
Cryptography provides information security with other useful applications as well including improved authentication methods, message digests, digital signatures, non-repudiation, and encrypted network communications. Older less secure application such as telnet and ftp are slowly being replaced with more secure applications such as ssh that use encrypted network communications. Wireless communications can be encrypted using protocols such as WPA/WPA2 or the older (and less secure) WEP. Wired communications (such as ITU-T G.hn) are secured using AES for encryption and X.1035 for authentication and key exchange. Software applications such as GnuPG or PGP can be used to encrypt data files and Email.
Cryptography can introduce security problems when it is not implemented correctly. Cryptographic solutions need to be implemented using industry accepted solutions that have undergone rigorous peer review by independent experts in cryptography. The length and strength of the encryption key is also an important consideration. A key that is weak or too short will produce weak encryption. The keys used for encryption and decryption must be protected with the same degree of rigor as any other confidential information. They must be protected from unauthorized disclosure and destruction and they must be available when needed. PKI solutions address many of the problems that surround key management.
[edit] Process
The terms reasonable and prudent person, due care and due diligence have been used in the fields of Finance, Securities, and Law for many years. In recent years these terms have found their way into the fields of computing and information security. U.S.A. Federal Sentencing Guidelines now make it possible to hold corporate officers liable for failing to exercise due care and due diligence in the management of their information systems.
In the business world, stockholders, customers, business partners and governments have the expectation that corporate officers will run the business in accordance with accepted business practices and in compliance with laws and other regulatory requirements. This is often described as the "reasonable and prudent person" rule. A prudent person takes due care to ensure that everything necessary is done to operate the business by sound business principles and in a legal ethical manner. A prudent person is also diligent (mindful, attentive, and ongoing) in their due care of the business.
In the field of Information Security, Harris[9] offers the following definitions of due care and due diligence:
"Due care are steps that are taken to show that a company has taken responsibility for the activities that take place within the corporation and has taken the necessary steps to help protect the company, its resources, and employees." And, [Due diligence are the] "continual activities that make sure the protection mechanisms are continually maintained and operational."
Attention should be made to two important points in these definitions. First, in due care, steps are taken to show - this means that the steps can be verified, measured, or even produce tangible artifacts. Second, in due diligence, there are continual activities - this means that people are actually doing things to monitor and maintain the protection mechanisms, and these activities are ongoing.
[edit] Security governance
See also: Information Security Governance
The Software Engineering Institute at Carnegie Mellon University, in a publication titled "Governing for Enterprise Security (GES)", defines characteristics of effective security governance. These include:
- An enterprise-wide issue
- Leaders are accountable
- Viewed as a business requirement
- Risk-based
- Roles, responsibilities, and segregation of duties defined
- Addressed and enforced in policy
- Adequate resources committed
- Staff aware and trained
- A development life cycle requirement
- Planned, managed, measurable, and measured
- Reviewed and audited
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