On February 12, 2013, President Obama issued Executive Order (EO) 13636, directing the National Institute of Standards and Technology (NIST) to  establish a “framework to reduce cyber risks to critical infrastructure,” which was defined as  “systems and assets, whether physical or virtual, so vital to the United States that the incapacity  or destruction of such systems and assets would have a debilitating impact on security, national  economic security, national public health or safety, or any combination of those matters.”1  President Obama required the framework to include “a set of standards, methodologies, procedures,  and processes that align policy, business, and technological approaches to address cyber risks.”2  This framework was intended to provide a “prioritized, flexible, repeatable, performance- based,  and cost-effective approach” to manage cybersecurity risk.3

NIST subsequently hosted a series of workshops with stakeholders and solicited comments on a  preliminary version. At the end of this process, NIST released Version 1.0 of the “Framework for  Improving Critical Infrastructure Cybersecurity” (the Framework) on February 12, 2014.

NIST describes the Framework as providing a “common taxonomy and mechanism for organizations to: 1)  Describe their current cybersecurity posture; 2) Describe their target state for cybersecurity; 3)  Identify and prioritize opportunities for improvement within the context of a continuous and  repeatable process; 4) Assess progress toward the target state; 5) Communicate among internal and external stakeholders about cybersecurity risk.”4 The Framework, which focuses on risk-management, is  technologically neutral and is not industry- specific.5 It is designed to complement, rather than  replace, a company’s existing risk- management practices.6 NIST anticipates that the Framework  “will continue to be updated and improved as industry provides feedback on implementation.”7

The Framework consists of three parts. First, the Framework Core “presents industry standards,  guidelines, and practices in a manner that allows for communication of cybersecurity activities   and outcomes across the organization from the executive level to the  implementation/operations  level.”8 Second, the Framework Implementation Tiers “describe the degree to which an organization’s  cybersecurity risk management practices exhibit the characteristics defined in the Framework,”  i.e., they describe general categories of overall cybersecurity sophistication.9 Third, the  Framework Profiles “can be characterized as the alignment of standards, guidelines, and practices  to the Framework Core in a particular implementation scenario,” i.e., they state an entity’s  performance (or goals) across the  various elements of the Framework Core.10

The Framework Core

The Framework Core “presents cybersecurity outcomes identified by industry as helpful in managing cybersecurity risk” and “is not a 

checklist of actions to perform.”11 It is presented in the form of a table that effectively  explains how, through meeting broadly accepted cybersecurity standards, a critical infrastructure  operator can improve its performance of key security functions. The Framework Core is broken into  four elements:

  • Functions “organize basic security activities at their highest level.”12 These functions are:  Identify (“Develop the organizational understanding to manage cybersecurity risk to systems,  assets, data, and capabilities.”); Protect (“Develop and implement the appropriate safeguards to  ensure delivery of critical infrastructure services.”); Detect (“Develop and implement the  appropriate activities to identify the occurrence of a cybersecurity event.”); Respond (“Develop   and implement the appropriate activities to take action regarding a detected cybersecurity  event.”); and Recover (“Develop and implement the appropriate activities to contain the impact of a  potential cybersecurity event.”).13
  • Categories subdivide functions into “groups of cybersecurity outcomes closely tied to  programmatic needs and particular activities.” Examples include: “Asset Management,” “Access  Control,” and “Detection Processes.”14
  • Subcategories divide categories into “specific outcomes of technical and/or management  activities.” Examples include: “Data-at-rest is protected,” “External information systems are  catalogued,” and “Notifications from detection systems are investigated.”15
  • Informative References are a non- exhaustive list of “specific sections of standards,  guidelines, and practices common among critical infrastructure sectors that illustrate a method to  achieve the outcomes associated with each subcategory.”16

The Framework Implementation Tiers

The Framework Implementation Tiers provide entities with a means to categorize their overall  cybersecurity performance. However, NIST is careful to explain that “Tiers do not represent  maturity levels,” and that while “[p]rogression to higher Tiers is encouraged” when such a change  is cost-effective and enhances cybersecurity, “[s]uccesful implementation of the Framework is based  upon achievement of the outcomes described in the organization’s Target Profile(s) and not upon  Tier determination.”17

The four Tiers, each of which is described in terms of “Risk Management Process,” “Integrated Risk  Management Program,” and “External Participation,” are:

  • Tier 1: Partial—Risk management practices are ad hoc; there is limited awareness of  cybersecurity risk; and participation in external entities (e.g., an Information Sharing and  Analysis Center) is limited.
  • Tier 2: Risk Informed—Risk management practices are approved by management, if not established  entity-wide; organizational awareness of cybersecurity risk is not matched by an organization-wide  approach for managing that risk; and the entity has not formalized its external interaction  capabilities.
  • Tier 3: Repeatable—Risk management practices are formally approved, expressed as policy, and  regularly updated; there is an organization-wide approach to managing cybersecurity risk, including  through knowledgeable personnel; and the entity engages in information sharing with external  partners.
  • Tier 4: Adaptive—Risk management practices are updated through a process of continuous  improvement; cybersecurity risk management is part of the organizational culture and is based on  past activities and continuous system awareness; and the entity actively shares information with  partners to facilitate improved cybersecurity before a cybersecurity event occurs.18

The Framework Profile

NIST describes a Framework Profile as “the alignment of the Functions, Categories, and  Subcategories with the business requirements, risk tolerance, and resources of the organization,”  and explains that a “Profile enables organizations to establish a roadmap for reducing  cybersecurity risk that is well aligned with organizational and sector goals.”19 An entity may  generate a “Current Profile” and a “Target Profile.”20 In other words, then, a Framework Profile is  the assessment that a company generates when it uses the Framework Core to evaluate its  cybersecurity posture—e.g., strong in certain categories, weak in others—and to determine which  areas it should strengthen in order to manage its cybersecurity risk.

How to Use the Framework

NIST identifies four ways to use the Framework:

  • Basic review of cybersecurity practices, by comparing an organization’s current cybersecurity  activities with those outlined in the Framework Core.21
  • Establishing or improving a Cybersecurity Program.
  • Communicating cybersecurity requirements to stakeholders, including service providers and  partners.22
  • Identifying opportunities for new or revised informative references, such as through  collaboration with technology leaders and standards bodies.23

NIST also includes a subsection entitled “Methodology to protect privacy and civil liberties” in  the “How to Use the Framework” section. It responds to the EO’s requirement that the Framework  include a methodology “to protect individual privacy and civil liberties,”24 and provides “a  general set of considerations  and processes” to “address individual privacy and civil liberties implications that may result from cybersecurity operations.”25 The Framework does not identify specific “Informative References”  (i.e. existing standards) that an entity might use to protect individual privacy.26 Instead, it  describes general categories of activities for managing risk to individual privacy.27 Within those  categories, it identifies steps the entity might take to protect individual privacy. For example,  within the “Awareness and training measures” category, it identifies one steps as: “Applicable  information from organization privacy policies is included in cybersecurity workforce training and  awareness activities.”28

Next Steps

Implementation: EO 13636 directs the Secretary of the Department of Homeland Security (DHS) to  establish, in coordination with sector-specific agencies, “a voluntary program to support the  adoption of the Cybersecurity Framework by owners and operators of critical infrastructure and any  other interested entities,” including through the establishment of incentives for participation in  that program. To that end, DHS launched the “C Cubed” (or “C3”) voluntary program29 to coincide  with the release of the Framework. The stated purposes of that program are to: “1) support industry  in increasing its cyber resilience; 2) increase awareness and use of the Framework; and 3)  encourage organizations to manage  cybersecurity as part of an all hazards approach to enterprise  risk management.”30 DHS further states that “The C³ Voluntary Program’s focus during the first year  will be engagement with Sector-Specific Agencies (SSAs) and organizations using the Framework to  develop guidance on how to implement the Framework.31 Later phases of the C³ Voluntary Program will  broaden the program’s reach to all critical infrastructure and businesses of all sizes that are  interested in using the Framework.”32

Regulation: EO 13636 requires “agencies with responsibility for regulating the security of critical infrastructure” to evaluate “current  cybersecurity regulatory requirements” and, “if they are deemed to be insufficient,” to propose,  within 90 days of publication of the Framework, “prioritized, risk-based, efficient, and  coordinated actions … to mitigate cyber risk.”33 EO 13636 similarly recommends that independent  regulatory agencies with relevant responsibilities engage in a consultative process “to consider  prioritized actions to mitigate cyber risks for critical infrastructure.”34

Regulatory agencies have not yet indicated what “prioritized actions” they might take in response  to the Framework, but at least three categories of action are possible.

First, an agency could attempt to mandate or encourage, either by rule or through guidance,  adoption of a portion of the Framework Core.35

Second, an agency could impose disclosure requirements based on the Framework. The SEC, for  example, recently has pressed registrants for disclosure of cyber risk. It may find the Framework  Tiers to provide an appealing template for relevant disclosure requirements.

Third, a regulator could attempt to use the Framework in the exercise of otherwise unrelated  enforcement authority. The Consumer Financial Protection Bureau, for example, has authority to  bring actions for “abusive acts or practices” against covered financial institutions, and  conceivably could seek to prove that, by failing to pursue an appropriate target profile, a company  took “unreasonable advantage” of “the reasonable reliance by the consumer on a covered person to  act in the interests of the consumer.”36

Litigation and Insurance: The three elements of the Framework also are likely to play a role in  future litigation, as well as in the insurance markets. First, the Framework Core provides a  vocabulary for identifying a cybersecurity failure (e.g., a failure of detection, identification, etc.), and it specifies particular industry standards that are intended to reduce  the risk of such a failure. Though these risk- management tools should properly be expected to  reduce, rather than eliminate, risk, and although the framework imposes no mandatory legal  obligations, the plaintiffs may attempt to use the failure to meet identified “Informative  References” as a basis for liability, whether for a data breach or another form of harm. Second,  insurance companies may find the Framework Tiers, as well as the more granular elements of the  Framework Core, to be useful as they look to build actuarial analyses of cyber risk. Third,  information relating to a company’s work toward a goal Framework Profile may prove to be fertile  ground for civil discovery with respect to a company’s awareness of cybersecurity risk, as well as  its decisions how to prioritize and address those risks.