In today’s rapidly evolving digital landscape, cybersecurity breaches are no longer a question of if, but when. Yet, many organizations overlook a critical component of cyber resilience: internal controls and effective enterprise risk management (ERM).
Without robust internal controls, companies open themselves up to significant vulnerabilities — from data breaches to operational disruptions — undermining both organizational trust and financial stability. According to IBM’s Cost of a Data Breach Report, the global average total cost of a data breach reached $4.45 million in 2023, a 15% increase over three years.
So, what’s causing these gaps? The absence of clear policies, monitoring, and accountability structures is often to blame. Enterprises that fail to implement and maintain comprehensive internal controls mismanage risk and leave exploitable gaps in their cybersecurity posture.
The High Cost of Ignoring Internal Controls
Without effective internal controls:
- Threat actors exploit vulnerabilities left unmonitored.
- Third-party risks go unchecked, leading to supply chain compromises.
- Regulatory compliance gaps may result in costly fines and reputational damage.
The 2023 Verizon Data Breach Investigations Report found that 74% of breaches involve the human element, including errors and privilege misuse — risks that effective internal controls are designed to mitigate.
13 Essential Tasks to Strengthen Internal Controls and Avoid Breaches
To mitigate these risks and bolster ERM, executives must champion a set of actionable, recurring tasks that embed security and accountability into the organization’s DNA. Below are 13 critical tasks every enterprise should implement:
Annual Asset Management Policy Review
Ensures a comprehensive and updated understanding of all assets and their protection needs.
Annual Change and Configuration Management Policy Review
Prevents unauthorized changes and maintains system integrity through standardized change processes.
Conduct Cybersecurity Control Functional Reviews
Regularly tests security controls to verify they are working as intended and are effective against emerging threats.
Establish a Discrete Line Item for Information Security and Privacy in the Budget
Guarantees dedicated funding to address evolving cybersecurity risks and ensures leadership accountability.
Identify Information-Security Authorities and Special Interest Groups
Taps into up-to-date threat intelligence and best practices by collaborating with trusted external security organizations.
Log Third-Party Service Provider Actions
Monitors vendor activity to detect suspicious or unauthorized actions that could compromise enterprise data.
Detect Logging Failures
Ensures security monitoring is uninterrupted and alerts teams when critical logs are missing or incomplete.
Maintain an Up-to-Date Cloud Service Provider Inventory
Keeps track of all cloud services in use, reducing shadow IT risks and ensuring contractual security obligations are met.
Establish a Risk Monitoring Program
Provides continuous visibility into risk posture and adapts controls to shifting threat landscapes.
Conduct External Audits of Cybersecurity Processes and Controls
Brings in independent experts to assess security measures and provide objective recommendations.
Plan Capacity and System Resources Required for Performance and Compliance Obligations
Ensures systems are resilient and compliant under peak usage and potential attack conditions.
Provide an Information Security and Business Continuity Report
Keeps leadership informed of current security status and readiness to respond to disruptions.
Conduct Internal Audits of Cybersecurity Processes and Controls
Identifies internal gaps and ensures policies are consistently enforced across the organization.
Building a Culture of Accountability
Embedding these tasks into annual and quarterly governance cycles is more than a checklist exercise — it fosters a culture of security, compliance, and proactive risk management.
Executives must understand that enterprise risk management without a security focus is incomplete. By investing in these control mechanisms, organizations protect their reputation, customer trust, and bottom line — all while staying ahead of regulators and adversaries.
Conclusion
The absence of internal controls is a silent but serious threat to enterprises. In a world where cyber threats are evolving daily, internal controls and enterprise risk management must be treated as board-level priorities.
Failing to act leaves organizations vulnerable to breaches that can cost millions and destroy reputations — a risk no executive should be willing to take.
