Most SEC-regulated firms take Regulation S-P seriously.
They invest in safeguards. They rely on experienced teams and trusted vendors. They have policies and tools in place.
As the latest amendments to Reg S-P take effect, however, I’m thinking about the early pressure points that are bound to emerge around how programs operate under real conditions.
Those pressure points don’t usually surface during planning. They appear when programs are tested by real decisions and compressed timelines. And while those moments may be understandable, they’re not unavoidable.
From a CFO’s seat, the added pressure of heightened Reg S-P scrutiny means that cybersecurity governance accountability can no longer be informal or assumed. This is one risk we all can — and should — get ahead of now.
Where Reg S-P programs tend to strain
Reg S-P involves three areas that firms tend to manage separately:
- Governance — policies, oversight, decision rights
- Technology — safeguards, access controls, monitoring
- Execution — incident response, coordination, notification
Each area may be reasonably well covered on its own. The challenges show up in how they connect in practice.
If ownership across these areas isn’t explicit, your readiness hinges on people remembering how things are supposed to work, rather than on a structure that’s designed to hold up under pressure.
That’s a handoff problem. It’s less about missing components and more about how well the components move together.
How ownership gaps might look at your firm
Ownership gaps don’t look like obvious failures. More often, they’re moments of hesitation or quiet handoffs that no one has specifically defined.
- An incident is escalated from IT to Compliance, but each assumes the other is still assessing severity.
- A vendor issue arises, but no one is clearly responsible for determining whether it triggers notification obligations.
- A containment step is taken by an MSP, yet leadership isn’t certain whether that action started a regulatory timeline.
- A tabletop exercise identifies gaps, but there’s no owner accountable for tracking what changed afterward.
- Evidence exists, but assembling it requires multiple people to reconstruct what happened and why.
None of these moments feel critical on their own. Together, they create risk at exactly the point when decisiveness matters most.
From a finance perspective, this is where risk shows up as diverted leadership time, duplicated effort, and decisions made later than they should be.
Decision rights are the first seam that shows strain
Early moments in a cybersecurity incident are chaotic.
Information arrives unevenly. Teams are assessing severity. Regulatory implications aren’t yet obvious.
At that point, leaders need to know:
- Who determines how serious this is?
- Who escalates, and when?
- Does a regulatory timeline apply?
- Who has decision rights?
When decision rights aren’t clearly defined, teams stay busy but decisions take longer than they should. That delay introduces leadership uncertainty — often just as the board or regulators start asking questions.
Firms that handle this well establish decision rights in advance, so escalation and accountability are clear before pressure sets in.
Proof and vendor coordination amplify ownership gaps
Unclear ownership makes other weaknesses harder to manage.
Evidence that lives across systems, vendors, and inboxes takes time to assemble. Vendor incidents introduce additional coordination complexity. Neither of these challenges is unusual.
But if no one is clearly responsible for bringing the full picture together, leadership is forced to switch gears — redirecting time from running the business to reconstruction instead: locating documentation, reconciling timelines, and responding to follow-up questions.
Programs that hold up under scrutiny, on the other hand, treat proof and vendor response as part of normal operations.
Why this shows up at the executive level
The handoff problem surfaces differently depending on role, but the impact converges at the leadership table.
For finance and operations leaders, it often shows up as:
- Uncertainty explaining exposure
- Difficulty answering follow-up questions cleanly
- Disruption at exactly the wrong moment
For technology leaders, it tends to appear as:
- Unclear escalation paths
- Overlapping responsibilities during incidents
- Vendor complexity that’s difficult to manage quickly
Different perspectives. Same underlying issue: coordination without clear ownership.
What “single ownership” actually means
Single ownership doesn’t mean one person does all the work.
It means one person is accountable for how the program functions as a whole.
That owner helps ensure:
- Decision rights are explicit
- Governance expectations align with operational reality
- Evidence is maintained consistently
- Vendor roles are clear during incidents
Without that accountability, readiness relies on memory and goodwill — neither of which scales when scrutiny intensifies.
A simple way to surface handoff issues early
You and the rest of your leadership team can identify coordination gaps quickly by asking three questions:
- Who owns Reg S-P end-to-end? (This should be a person, not a department.)
- Where does leadership look for status and proof? (You need one clear source of truth.)
- If an incident started late Friday afternoon, what happens next?
○ Who assesses severity?
○ Who escalates?
○ Who coordinates vendors?
○ Who tracks regulatory timelines?
Inconsistent answers usually point directly to handoff issues.
Find your gaps before pressure exposes them
Reg S-P risk hardly ever comes from a lack of effort. It comes from coordination that hasn’t been tested under real conditions.
We designed a Reg S-P Readiness: Executive Self-Assessment to help teams suss out ownership and coordination gaps early. Having operational and technology leaders answer the same questions independently — and digging into where their answers diverge — can quickly show you where risk lives.
For firms that want help interpreting those results and aligning next steps, we offer focused working sessions to improve your coordination and readiness.
Those that handle Reg S-P most confidently are the firms that know exactly who owns the bridge — and how it holds up when it’s needed.