There is a long list of reasons organizations need more control over hybrid cloud infrastructure and security. One of them is cyber materiality.

The SEC’s cybersecurity disclosure, adopted in 2023, states:

“… we are adopting amendments to require current disclosure about material cybersecurity incidents. We are also adopting rules requiring periodic disclosures about a registrant’s processes to assess, identify, and manage material cybersecurity risks, management’s role in assessing and managing material cybersecurity risks, and the board of directors’ oversight of cybersecurity risks.”

That’s a lot packed into one paragraph. In a nutshell, the focus of the requirements is on “material” cybersecurity incidents. Cyber materiality refers to whether or not a cybersecurity risk or incident is significant enough to influence the decisions of investors or stakeholders. From a disclosure perspective, organizations have four days to report “material” risks or incidents, and how those are (or are not) being managed.

These rules have significant implications across the enterprise, especially for:

• Cybersecurity protection strategies
• Risk management processes
• Management and board accountability
• Compliance
• And more

Naturally, the entire C-suite is attuned to these new requirements, but no one is more affected than the CISO.

»A tough, demanding job just got a lot harder

CISOs are used to high pressure situations. Ask any you know, they’ll tell you. The cybersecurity landscape is complex with threats increasing at exponential speed thanks to bots and AI. Just keeping pace with it all is a huge challenge.

For CISOs, the new requirements for reporting cyber materiality create serious time pressure, adding even more stress to an already demanding role. The four-day disclosure requirement means CISOs (and their team) are forced into double duty — they must mitigate problems while investigating them at the same time to determine if they are material. This often means making decisions and communicating impact using less-than-certain information in order to comply and avoid penalties.

But even though the requirements are clear, determining if a cyber incident is in fact material is not.

• What constitutes a material cyber incident is not static.
• Calculating a precise financial impact of an incident can be daunting.
• Assessing materiality requires input from across the enterprise — security, legal, finance, executive leadership, and more.

It’s no surprise that many organizations have turned to drafting nebulous legal statements to meet the SEC requirements. But this does nothing to increase the security posture of the organization, which is the spirit behind the rules in the first place.

What if there was a better way? What if you could make it easier to comply with the rules and improve security posture?

»Automated infrastructure management and control

The cloud uses APIs. From a production-line perspective, we can think of these like mechanical arms on a factory floor. I can send instructions to APIs, and something happens.

If I have all these mechanical arms, do I want people on joysticks guiding the mechanical arms? To me, that's the equivalent of click ops. With click ops, I'm going to grab that arm and I'm going to make it do something over and over again, and I'm going to hope it's consistent. I’m hoping the person who's guiding the arm is doing it exactly like they should every single time. If they don’t, I have a potential problem.

Without automation, it’s very hard to establish and enforce standards. And without standards in the cloud world, infrastructure management quickly turns chaotic and potentially creates serious security gaps.

Automating infrastructure lifecycle management (ILM) and combining it with security lifecycle management (SLM) using The Infrastructure Cloud from HashiCorp helps organizations shift their culture and processes away from chaos and toward efficiency and standardization. Adopting the Infrastructure Cloud approach makes it easier to comply with the new SEC rules and improve security posture in several ways:

• Enables modern infrastructure provisioning with infrastructure as code.
• Maintains security and compliance at all times using a single system of record for infrastructure and security across all cloud environments.
• Enforces security policies consistently across all environments by integrating policy as code into standardized images and workflows.
• Automates vulnerability and patch management.
• Streamlines audits from weeks to days.

That auditing improvement is one of the biggest advantages. Cyber materiality disclosure requirements put a lot of pressure on security teams, managers, and C-suite executives because they need to gather a lot of information in a short amount of time. Reporting a material incident to the SEC and your board requires filling out an 8-K form — a time-consuming task if you don’t have a lot of information about your infrastructure state available through centralized tools with good tracking and monitoring.

What if a cyber material incident happens, and you had…

• A record of every cloud environment built
• How each environment was configured or changed
• The design standards that were followed
• Records for every sensitive credential used
• Recordings of environment access sessions

That’s the level of automation that the Infrastructure Cloud approach can bring to organizations. This would dramatically simplify incident investigation and SEC reporting, and improve the overall security posture of your organization at the same time.

»Learn more

The Infrastructure Cloud is a unified platform approach that helps organizations make the most of cloud investments. It lets you manage the full lifecycle of your infrastructure and security resources through infrastructure as code, policy as code, dynamic secrets generation and management, and automated workflows.

For more information on this platform-based approach, read our booklet: Do cloud right with The Infrastructure Cloud.