Will Smaller Companies Buckle Under the SEC's New Requirements?

Data today flows across many companies, systems, and subsidiaries, making the task of distinguishing between victims and perpetrators incredibly difficult.

Determining what "may be material to investors'' isn't always obvious and will require administrative work to figure out.

Establishing communication with business-level executives and the board will become more critical, requiring further education and training.

EU Network and Information Security Directive v2 (NIS2): A directive aimed at achieving a high common level of cybersecurity across the European Union. It updates the original NIS directive to address evolving threats and improve the security of network and information systems. NIS2 provides guidelines for ensuring the security and resilience of critical infrastructure, which is essential for organizations operating in the European Union (EU). 

NIST Cybersecurity Framework (CSF): A set of guidelines and best practices to help organizations manage and reduce cybersecurity risk. Widely used in the United States and internationally, it helps organizations align and prioritize cybersecurity activities based on business needs and provides a common language for managing risk. 

NIST Risk Management Framework (SP 800-53): This framework provides a process for organizations to manage security and privacy risks, offering a catalog of security and privacy controls for federal information systems and organizations. It helps organizations implement a risk-based approach to security, ensuring that controls are tailored to specific needs.

NIST Guidelines for Protecting Controlled Unclassified Information (SP 800-171): This provides requirements for protecting controlled unclassified information (CUI) in non-federal systems and organizations. It helps organizations comply with federal regulations regarding the protection of sensitive information, reducing the risk of unauthorized access. 

ISO/IEC 27000: ISO/IEC 27000: A family of standards for information security management systems (ISMS), including ISO/IEC 27001, which specifies requirements for establishing, implementing, maintaining, and continually improving an ISMS. It provides a comprehensive framework for managing information security risks, ensuring that information assets are secure.

Center for Internet Security (CIS) Critical Security Controls (CSC): The CIS CSC is a set of best practices for securing IT systems and data, including a prioritized set of actions to protect organizations and data from known cyberattack vectors. It helps organizations prioritize their security efforts by focusing on high-impact areas, improving their overall security posture. 

Cobble together a small SOC team. Hire a senior security leader, an infrastructure security engineer, an application security engineer, and a compliance professional. These roles require experienced pros who can create a security road map, prioritize tasks based on risk, and implement scalable processes. These team members should have the capability to execute crucial elements of the security road map themselves.

Get closer with engineering. If you aren't already in close alignment with your development team, start now. Engineers familiar with the product can identify security gaps and improvement opportunities. This is vital for integrating secure practices throughout the software development life cycle, addressing penetration test findings, and adding customer-facing security features. Although resource constraints at startups make this challenging, demonstrating how early security interventions save time can help gain the necessary commitment.

Automate, automate, automate. Look for simple ways where automation can streamline security processes — from infrastructure monitoring and auto-remediation to code analysis and vulnerability management. By automating, startups can integrate security seamlessly into every process, which not only improves security but also conserves engineering time.

Try open source. While open source security tools eliminate license fees, they require time for implementation and configuration. For startups with small teams, choosing tools that vendors can deploy and manage might be more beneficial, ensuring that security enhancements are practical and cost-effective.

Cover risk and vulnerability management basics. Most breaches are related to known vulnerabilities and human error. Ensuring good attack surface visibility, scanning all assets, and meeting reasonable service-level agreements (SLAs) for critical security gaps are extremely important. These steps provide a starting point for smaller companies to navigate the new incident reporting rules. Even though the requirements create pressure, they serve help build a strong security foundation.