Risk and Security LLC

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Caroline Ramsey-Hamilton

How much does Accountability contribute to the Security Environment in an Organization?

Posted on July 17, 2009 2:01 pm by Caroline Ramsey-Hamilton Comment

Watching the Supreme Court confirmation hearings made me think about:

ACCOUNTABILITY. One of the problems faced by security directors in both IT and corporate security is that they are alone on the island. No one else wants to worry or think about security.

This may be a major underlying cause of why security problems are not easily solved, just by adding new technology. People still find ways to either ignore controls, or use them incorrectly.

One of the main benefits of a Distributed Risk Assessment is that it touches different people in the organization and increases their awareness – AND Accountability. The accountability element comes in because the risk assessment analyst can track each individuals answers so you can see a simple profile for each one, and see that they are either:

Complying MORE than others in the organization
Complying SIGNIFANTLY LESS than others in the organization
Are so clueless that they don’t know whether they are compliant or not.
Don’t think the security questions apply to them.

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With this kind of detail, you can also COMPARE individuals, compare business units, compare departments and this kind of detail also encourages accountability in the business unit manager.

Accountability could be the basis for fixing everything that is wrong in society, as well as in the security program.

Think about the impact if everyone took responsibility for their OWN health. It would change the world. What about if everyone took responsibility for their neighborhood’s safety and security? What if parents took responsibility for how their children performed in school?

Obviously – adding the element of Accountability into the security program could be very motivating.

Accountability is the exact opposite of passing the buck to someone else. And while accountability can be a daunting prospect (when you think about applying it in YOUR organization) — it is also empowering. It gives individuals control over their security and takes them from a passive to an active state.

And I hope everyone would prefer being in an active state!!


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Assessing Risk of Swine Flu (H1N1)

Posted on April 30, 2009 9:22 pm by Caroline Ramsey-Hamilton Comment

Largest webinar ever was today on the current pandemic (Swine or H1N1) flu.  I was surprised at how many organizations participated and we reviewed the different areas that business need to review when a flu like this threatens. 

Last year we created six different pandemic flu assessment questionnaires, differing on whether the business is tagged as a “critical industry”; whethere is is domestic, or has international offices; whether it’s a hospital or healthcare provider and also sliced and diced by the state of their pandemic and emergency plans such as continuity of operations planning.   Disaster planning is not really the same because in disaster planning, you assume the rest of the world is constant, instead of in the state of flux a real pandemic would produce.

In Maryland, there are six cases, and three of those in this county — they closed a school this morning.  So it is of concern to employees and the webinar centered on the different decisions business execs need to make about:

1) communicating with their employees and suppliers

2) making plans for auxcillary workforce members

3) doing advance planning and creating mechanisms for people to work from home, if necessary.

4) looking at last-minute cross training and making sure that everyone knows how to do almost everything.

The other aspect was understanding that this flu, at least initially, looks relatively mild, and as such, it makes a great case to run preparedness drill when people are watching the media coverage.  Also probably a good time to get budget approved for things like back up supplies, face masks (if execs are planning travel), or the business is very customer facing.

Reviewing training and trade show plans for the summer and fall would be a useful exercise.   And I think it is a service to employees to explain how to create a family pandemic stash of medicine, toilet paper, food, water and all the other necessities of life that would hold a family over for 3-6 weeks of isolation in the house.

These basic planning elements are all over the web and all over the news, but sometimes still hard to assimilate.  One of things we have developed is a spreadsheet of the planning elements, and I’d be happy to send it to you, if you send me a request to this blog.


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Building a Model for Security Governance, Risk and Compliance

Posted on April 3, 2009 1:35 am by Caroline Ramsey-Hamilton Comment

I recently began to think about how to integrate security seamlessly into an organization — without having security activities and processes pigeonholed into a stovepipe like physical security (the 3 Gs, guns, guards and dogs); or in the rarified atmosphere of the IT Department.

Other business processes are already thought of as an integral part of a business.  Think personnel, finance, shipping, sales.  All basic parts of any organization, including government agencies (which are another kind of business), have these different categories but security is never mentioned as one of these basics.

Of course, my readers know that none of the other pieces would get very far without good, or even great security.  You can’t run an organization without locks on the doors.  You can’t run a network with security controls or it would just collapse into a heaping pile of spam within a few hours and become totally useless.

So if we wanted to integrate security and use the risk assessment process to do it — what are the pieces we would integrate?   One night over dinner with other security people, we started to build a security model, which could then by assessed and each category would have steps which could be combined to create THE PERFECT INTEGRATED SECURITY GOVERNANCE MODEL!!

I am open to suggestions about other aspects but here’s the list of the ones we started off with:

1.  Access Controls

2.  Accountability

3.  Budget/Fiscal Responsibility

4.  Compliance

5.  Information Technology

6.  Investigations

7.  Measurement/Evaluation

8.  Personnel Management

9.  Policies & Procedures (Ps & Ps)

10. Risk Assessment & Management

11.  Security Planning

12.  Training and Awareness

In the model I’m proposing, each of these areas could by quantified into a 5-step program with zero meaning no progress in that area, and five meaning it has been integrated into the organization as a standardized, budgeted process.

Send me an email if you’d like to see a graphic of the model.  The point of a model is to get an idea of where you are on the pathway to integration of the security model into the business process.  For example, you could find out that you doing great on access control and technology, but not so good on accountability or awareness.  Then you could put more emphasis, or resources into those deficient areas.

If you’ve ever read this blog before, you know that my mantra is, “if you can’t measure it — you can’t manage it” (quote by the late, great Dr. Peter Drucker).

While listening to talk radio people discussing the problems of AIG, I heard another great line, “Companies that are ‘to big to fail’ … are probably ‘to big to manage’.   And that’s probably right, because those companies, with tentacles out into industries all over the world, are probably ALSO TOO BIG TO MEASURE!

So having metrics applies to all these corporate processes and managing security using metrics must be an idea whose idea has come.   Often the security departments in companies are isolated from the C-level and may not be included as often as other corporate or department managers are.    This is why the breakdown occurs that leads to weakness in compliance with regulations, which can destroy the entire organization, or, if you’re a bank, can lead at a CDO (Cease and Desist
Order).

Often these twelve critical security elements are absolutely essential to the running of the organization and that is why it is important to create a management model to measure how they are working in YOUR organization!



A New Model for Assessing Corporate Security

Posted on March 17, 2009 3:06 am by Caroline Ramsey-Hamilton Comment

Corporate Security — that is, what the federal government calls “Physical Security” has long been treated as a uneducated stepchild by the information technologists.  The old perception that Corporate Security is just about guns, guards and dogs is just not true anymore.   Instead, physical security has taken full advantage of the computer revolution to create security controls that run on computer networks and do amazing things like creating electronic perimeters inside hospitals (for visitor management); ID visitors and track vehicles and biometrically identify individuals.

Corporate security directors I have known are invariably smart, savvy and computer literate.   Here’s a look at the difference between the OLD physical security operations and the NEW corporate security organizations.  The OLD PS operations usually operated out a guard shack or basement office and the main activity was badging in security guards and checking badges.  The NEW PS operations are run out of a high tech command and control center and the Security Directors often have authority for not only security but also Risk and often, information security.

These Security Directors are very conscious of how to improve their department’s performance and they are getting involved with benchmarking and automating many of their functions, including their security risk assessments.  Not like the old site surveys you see on TV, where the person is walking through the dark high rise in the middle of the light, flashlight flashing. 

We have been working on a model that could easily show the main areas of corporate security and a model a company could use to track exactly where they are in the process of creating an optimum security organization.  We call it the “Corporate Security Governance Model” and it tracks twelve elements of security through five levels:

        1.  Just Starting (Incomplete) – No Commitment of resources to perform and manage this function.  No corporate sponsorship or awareness of it’s importance to the organization.       

        2.  Performing – Rudimentary start to incorporate this element into the security program.  Function may have been done once, but there is no repeatability or management commitment.

        3.  The organization has assigned a manager to create a process for this security element.  Funding  is available and management has been briefed.

        4.   The element is recognized formally in the corporate policy and has been funded. Training has been introduced and metrics identified.

        5.   The element has become part of the company culture as policy and has training and funding which occur automatically.

There are a nine elements which are tracked across the five levels above.   We need to add three more — so please send me your comments on what those should be.

As of today, here are the different elements:

1.  Access Control
2.  Compliance (Regulatory)
3.  Information Technology
4.  Loss Prevention
5.  Materials Management (looking for a better phrase for this)
6.  Personnel
7.  Policies and Procedures
8.  Risk Assessment & Management
9.  Training and Awareness

Each of these elements will be explained with the actions to be performed, or improved, at least level and the idea will be that a corporate security organization will work toward getting all 5’s across the board.  

What elements are we missing?   Please post your comments or email me directly at:  chamilton@riskwatch.com and I will send you a copy of the model, which is a work in progress.

I think a model like this can be populated and automated so that an organization can get a fast 10 minute read that gives a snapshot of the security governance of the organization under review.

The next step is creating fixes for each of the steps so that it makes moving along the continum easier and faster.



Take a Valentine Risk Assessment

Posted on February 14, 2009 3:12 pm by Caroline Ramsey-Hamilton Comment

I think they should make people do a risk assessment on their proposal relationship and turn it into the city office when they go to get a marriage license — I thought it would be appropriate to introduce it on Valentine’s Day!

So to design our risk assessment, first we need to create a list of assets — joint assets.  How about the 2 houses, the 2 cars, the children from the former marriage, the inlaws — actually all the relatives on both sides, and pets (dogs, horses, etc.) any cash including stocks, bonds and salaries.  Probably also insurance policies, household goods, jewelry, musical instruments and collections.

Now we can model the potential losses we could suffer if the relationship fails:  Death or personal injury, divorce, alienation of affection, compromise and loss of assets.    Now we can add in the threats that could cause one of the projected losses to occur.  Threats could include things like:   children, relatives, job loss, illness, death, affairs, theft, business travel, alienation, depression, substance abuse. 

Next are the vulnerabilites in the relationship that could sabotage the whole thing — here are some of the questions we might make the prospective marital participants ask:

Do you work out of town more than 1 month a year?

Do you have more than four children?

Will one spouse be staying at home?

Do you have two incomes?

Does each partner have a healthy asset to debt ratio?

Do the partners have the same religion?

Do the partners have more than two common interests?

Are the partners equal in education?

Are the partners equal in life experience?

Is there a history of mental illness in your family?

Is there  family history of major medical problems, i.e.,
       diabetes, cancer, respiratory problems, cardiac issues, etc.

Do the partners have the same political parties?

Do the partners have a shared vision for the future?

So once the questions are all answered — and possibly weighted for importance — for example, I would put higher weight on questions about family medical history and financial health.  

We link the elements together according to a pre-set algorithm and then we give the couple risk rating:

80 – 100% – chance for a healthy relationship

50 – 79%    – possibility of healthy relationship if vulnerabilities are fixed

30- 49%      – possibility of healthy relationship is doubtful

1 – 29%        – healthy relationship unlikely to be successful.

The answer would also indicate outstanding vulnerabilities (think of a
vulnerability as a window of opportunity for a threat to materialize),
for example, health, financial assets, illness, mental illness, alcohol abuse, drug abuse, obsessive compulsive disorder, responsibility, accountability, policies, romance, weight control etc.

Based on the outcome of the assessments — say the score comes in at
70%, then counteracting controls are recommended such as:

Start Exercise Program
See psychologist for extensive analysis
Schedule a date night once a week
Hire a financial counselor
Take yoga classes
Reduce stress
Quit your second job
Take a real vacation once a year

I think that using quantitative tools at the beginning of a marriage or serious relationship might be a great idea!  The city could charge another $20 for rating the assessment so it would not only save relationships but serve as a revenue generator for city and county government!

That’s your risk assessment for Valentine’s Day.  Please let me know if you’d like to fill out one of my prototype questionnaires, or maybe contribute to the model.   Enjoy the day!



Accountability and the Link to Senior Management Salaries – Can it be measured or assessed?

Posted on February 12, 2009 2:12 pm by Caroline Ramsey-Hamilton Comment

The recent Stimulus Bill passed in February 2009 called bank presidents up to Capital Hill to report how much they made and whether they took bonuses or not.  Most reported they made one million dollars a year and took no bonuses.   Of course, we might suspect that this was slight underreporting.

Is there a link we can assess between performance and compensation?  In a factory, where people are paid by piece work, that is, ten cents for each piece sewn, there is a direct correlation and you could probably provide other examples of direct pay for direct work.

Another place to look is sales compensation.  Again, salespeople are incentivized by commissions so there is the correlation — work harder, get paid more.  

But the farther you go up management food chain, the harder it is to see the relationship between production and/or success of the enterprise and the salary of senior management. 

A recent study by the Health Services Research found that doctors who were paid more for higher quality care did improve their performance. It examined whether patients seeing physicians participating in a “pay-for-performance” incentive program receive better care than those who saw non-participating physicians. The health plan that was examined reimburses physicians based on the quality of care they provide. 

What about in other industries?  In another study, they analyzed the 100 largest technology companies finds that those with the highest-paid CEOs in 2005 had the worst returns.    DolmatConnell & Partners, an executive compensation consulting firm based in Waltham, Mass., found there was an inverse correlation between tech CEO pay and shareholder returns over a one-year period.    Companies analyzed in the study included Cisco Systems, Dell, EMC, Google, Hewlett-Packard, IBM,  and Oracle, as well as telecommunications providers, technology services companies and products distributors.

Perhaps the answer lies in the amount of PERSONAL ACCOUNTABILITY the senior managers have in the success of the organization.  If high paid managers are isolated and insulated from the operations of the company, they may not be in a position to directly affect its success, whether you define success as higher stock price, profitability, improved EBITA or some less quantitative standard, such as, are the employees happier?

Organizations where management stays involved with the day to day operations and can use their influence and wisdom to influence the progress, might be able to make a bigger impact on success of the organization.



Credit Unions and NCUA regulators

Posted on February 9, 2009 5:26 pm by Caroline Ramsey-Hamilton Comment

According to several companies that track such things — the number one thing that NCUA regulators are asking credit unions for this year is a copy of their risk assessment.

With fifty-five new regulators planned for 2009, the NCUA also announced it’s plan to move to a twelve-month examination cycle.  This is in contrast to the previous 18-24 month examination cycle, and has prompted a written complaint by the Credit Union National Association (CUNA) which objects to adding new regulators, as well as objecting to the new examination cycle.

In fact, CUNA wrote, “We find this draconian and believe there is a more cooperative way in which NCUA and the state regulators can discuss this issue …”.   It may turn out to be more prudent than draconian, because these risk areas, which should be detailed in the risk assessment, are areas that many credit unions have ignored, or have managed to ‘get by’ with a homemade spreadsheet, which does little to identify or quantify risk.

In a risk adverse environment with regulator issues on television every day, CUNA did state that  “given the economic crisis and the need for NCUA to be able to continue reporting to Congress that it is handling problems well, CUNA is not opposing this change [the 12-month cycle]”, and continued, “Even so, we strongly support a reasonable phase-in period that focuses on problems and risk first.”

Looking at this, it seems that part of the problem is a disconnect between the financial regulators and the credit union senior management.  Management and the Board looks at these requirements as annoyances that have to be completed and keep them from more important work — like getting new members or new loans, instead of looking at the risk assessment as a support to their business process.

When viewed as an integral part of a business process, it is clear that the risk assessment supports management by providing a quantitative view of the entire IT program, or the entire operational processes of the credit union.   It supports management decisions directly by providing real justification for the controls that management and the Board need to implement; and by giving the NCUA regulators visibility into those decision processes.

It shows the logic of the decision process, i.e., why management decided to use biometrics on their laptops; or why they need to shift some of the security controls to their outsourced vendors and making the vendors more directly responsible for security.   This allows the regulators to give better advice, and support to the credit union, because there is a rational process that can be discussed and examined, to the overall benefit of improved operations for the credit union.

The intent of increased regulation is not always to aggrevate or criticize the credit union management, but can be positive force which allows the credit union to advance, gain new members and be more profitable.



TARP Risk

Posted on February 6, 2009 8:45 pm by Caroline Ramsey-Hamilton Comment

What is the risk associated with taking TARP money from the federal government?   If the government is going to create difficult milestones and lots of requirements — like limiting of CEO salaries and banning bonuses — it might not be the bonanza everyone seems to think.

We recently were contacted by a company that is turning into a bank just to get their share of the TARP and Stimulus dollars.  Of course, they may not understand the downside of being a bank which would include heavy regulatory compliance AND the ‘mark to market’ problems.

Thinking about a risk assessment for the TARP took another direction — what kind of formal risk process could be used by feds to judge whether a particular bank or company was TARP-worthy.   After you throw out all the joke lines — e.g., do they own corporate Gulfsteam jets?, then what would you look for?   Here’s a list of possible factors:

Value of company to overall economy
Ratio of bonuses to overall revenue
Ratio of CEO pay compared to overall revenue
Number of ‘retreats’ taken annually
Growth potential
Analysis of potentially impacting threats

These would be all mapped against the perceived value of the company in terms of dependencies, i.e., is the company the sole industry in its community or region?  

Is the company a critical element in the military industrial complex — does it have Defense implications?

Does it represent an underrepresented or endangered industry?

Past record for regulatory compliance.  It might be interesting to see how compliant the company was with previous regulations, as an indicator as to whether they would comply with all TARP/Stimulus bill requirements.

Obviously there might be a subjective edge to these ratings and the Government Accountability Office (GAO) would have to be the agency to administer these risk assessments.

Probably the hardest part would be ensuring that the recommendations made by GAO would be honored by the legislators.   But I like the risk model applied to the TARP.



Risks that Derail

Posted on January 7, 2009 4:45 am by Caroline Ramsey-Hamilton Comment

I have been neglecting my blog, but I have a very good excuse.  I have just survived one of the worst experiences someone can have — watching a dear sister die unexpectedly from a brain tumor. 

It brings up lots of issues — one is, “Gee, maybe all that about cell phones and brain tumors is really true!”.   Another relation has two small children and they BOTH have had a brain tumor, and they under five years old.   If I lived in their neighborhood, I would check the water supply first.

My sister Linda was my baby sister, two years younger than me.  We were as close as twins and even had our own language.  I spent two weeks up at Lake Tahoe with her this summer.   Ten days after that she attended a wedding in Minneapolis and collapsed at the wedding.  Of course, she was perfectly healthy, married to a doctor, swam two miles a day in the lake, only ate healthy food, flossed constantly — you get the idea.  

After her collapse, it was four months until she died in a coma.  The decline was fierce and frightening.  And it took my nuclear family which was five people only a few years ago, down to two left — just me and my younger brother.  Nothing like getting shoved in front of the generational train.

So I did my risk assessment four months ago and decided that I should spend as much time with my sister as possible, so I have been flying back and forth from Annapolis to Davis, California (in the vast Central Valley), since the 8th of September.     And now I’m back.

It did give me a new appreciation of the problems of carrying medical records around and having them available for the next healthcare provider.  Just one rotate-able brain scan takes up almost two CDs — files too big to email, almost too big to fit in my oversized purse.

Having done everything I could, but left with the inevitable result, I am back to thinking about risk and consequences.  And thinking about loss, and how to avoid it in the future.

And how to encourage others to avoid it, too.   Loss Prevention through Risk Assessment — that’s going to be my mantra in 2009.  That and remembering my wonderful sister, Linda Lee .

I hope you will take the journey with me.

 

                                                   — Caroline Hamilton




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