A company may divest its assets for a number of reasons: political, social or purely financial in order to free up resources to focus on core business. Regulators may also demand a divestment to prevent one company holding a monopoly. When such a decision is made, the security function can support the business by managing risks during this process. These risks not only include the obvious legal and regulatory compliance ones, but also risks related to business disruption and leaks of intellectual property or other sensitive information. Security teams can also help the business identify value adding opportunities through, for instance, saving costs on software licenses.
The scale of divestments vary and depend on the nature of the organisation: they can range from a single subsidiary to a whole division. Information usually accompanies physical assets, which opens up potential challenges with data governance when these assets change hands. The magnitude of such risks differ depending on specific conditions of the deal, for example:
- Number of assets is scope
- Criticality of assets
- Location of assets and applicable jurisdictions
In my experience, divestments are almost always associated with aggressive timelines for completion usually in the form of legally binding agreements. Therefore, as a security professional, the last thing you want to do is to slow down the process and prevent the business from meeting these timelines.
You need to balance this, however, with the risk exposure. It helps when the security team gets involved early to support the process from the start. All too often, however, the business can be asking for security sign-off after the finalisation of the deal. This can be disappointing, particularly when a number of data transfer requirements have already been violated.
So if you’re one of the lucky ones, and the business is asking for your advice on divesting securely, what should you tell them? What areas do you consider? Here are some examples to get you started:
- Information asset inventories and data maps. These might include data, software and infrastructure assets. You can’t help securely transfer something you don’t know exists. Start with establishing visibility and interdependencies.
- Access control. Who has access to what? Do they need that access? Will they need that access in the future? Segregation of duties and least privilege principles are not just abstract philosophical concepts – they have real applications when it comes to divestments.
- Consider legal and regulatory requirements when it comes to data asset transfer, retention and disposal. Involve your legal team, but don’t forget about technical controls, like encryption and secure data wipes.
- Availability of skilled resource and mature IT function on the ‘buy’ side. Remember, whoever is buying the assets must have their infrastructure ready to support the acquisition and integration of new assets. Despite being perceived as a ‘buyer’s problem’, risks like that can negatively impact the overall project and should be considered.
All in all, the divestment process can be challenging but the early integration of security professionals ensures the appropriate oversight is given to all relevant areas for a smooth transfer to the buyer.
Image by Jason Kuffer.