Cybersecurity Governance for Utilities: Owning Risk and Compliance

Who is ultimately accountable for cybersecurity at your utility?

When decision rights are unclear, risk accelerates. In 2024, cyberattacks on U.S. utilities surged by 70%, with 1,162 recorded incidents through August, compared to 689 in the same period the year prior, according to Check Point Research.

Utilities face a dual challenge: IT systems manage data and digital operations, while OT systems control physical infrastructure like the grid and substations. Governance must cover both, but in most organizations, these environments remain siloed.

Regulatory pressure is rising. NERC CIP standards, TSA directives, and DOE guidance all demand one thing: stronger governance with clear accountability. This article lays out a model for utility leaders to assign ownership, align IT and OT, and make cybersecurity a measurable business function.

What Is Cybersecurity Governance?

Cybersecurity governance defines who is responsible for making decisions, setting policy, and being held accountable for cyber risk across the utility. It differs from operations. Cybersecurity operations deal with tools, controls, and day-to-day defenses. Governance sets the strategy that directs them.

For utility companies, this strategy must span both IT and OT environments. IT teams manage digital systems, data security, and cloud infrastructure. OT teams oversee operational technologies, like SCADA systems and smart grids, that control power generation and delivery. Without unified governance, these critical systems remain exposed to cyber threats and regulatory gaps.

Core elements of a strong cybersecurity governance framework include:

1. Clear role ownership across departments
2. Defined escalation paths for cyber incidents
3. Decision-making authority tied to business risk
4. Enforcement of cybersecurity policies and controls

Unlike other industries, the utility sector faces a higher bar. Regulatory frameworks like the North American Electric Reliability Corporation (NERC) CIP, the Department of Energy’s cybersecurity requirements, and the National Institute of Standards and Technology (NIST) guidelines demand governance that is not just effective, but audit-ready.

Utilities must treat governance as a business function. It’s not enough to respond to attacks. Strong cybersecurity governance ensures resilience, reduces vulnerabilities, and improves overall cybersecurity posture before the next crisis hits.

Top Challenges Facing Utility Governance

Most utility companies face the same four structural failures when it comes to cybersecurity governance. Each one creates friction, delays accountability, and weakens the organization’s ability to manage risk.

1. IT–OT disconnect
Most utilities lack governance structures that span IT and OT. These domains run on separate teams, tools, and protocols. OT systems like substations are often excluded from enterprise cybersecurity programs, exposing critical infrastructure to cyber threats and compliance risks.

2. Compliance-first culture
Many utilities treat cybersecurity as a checkbox exercise, driven by NERC requirements. But passing a CIP audit does not mean the organization is secure. Without risk-informed governance, vulnerabilities go unaddressed, and controls lack business relevance.

3. Executive blind spots
Cyber risk is often miscategorized as a technical issue. When boards and senior leadership fail to treat it as a core business risk, investment lags, accountability weakens, and response coordination breaks down. Governance only works when ownership starts at the top.

4. Organizational resistance
Legacy processes and siloed reporting structures make cross-functional enforcement difficult. Many utilities still lack defined decision rights or escalation paths that connect IT, OT, and compliance during cyber incidents. This weakens response speed and consistency.

Without addressing these structural gaps, utilities can’t improve their cybersecurity posture or reduce risk across the supply chain. Governance isn’t a policy. It’s the foundation of resilience.

Effective Governance Models for Utilities

Choosing the right governance model shapes how utility companies manage cyber risk and resilience. Structure defines accountability, response speed, and whether cybersecurity is fully embedded across the organization.

Centralized Governance

A centralized model places authority under a single executive, typically the CISO. This supports stronger oversight, faster escalation, and consistent implementation of cybersecurity practices across IT and OT. It's especially effective for improving visibility and enforcing risk management standards. However, in larger or decentralized utilities, it can limit operational flexibility and slow localized decision-making.

Federated Governance

A federated model distributes cybersecurity responsibilities across business units, with coordination through a central governance board. It aligns with how many utilities operate today and allows teams to address risks specific to their systems and environments. But without clear escalation paths and defined ownership, this model can lead to uneven policy enforcement and diluted accountability.

Regardless of structure, utilities must formalize a governance board with representation from IT, OT, compliance, and executive leadership. For operational follow-through, Managed Security Services can help enforce governance decisions, monitor controls, and track risk trends at scale. Governance only works when roles are defined, decisions are enforced, and cyber risk is treated as a core business concern.

Turning Governance into Performance: Metrics That Drive Accountability

Effective governance depends on measurable outcomes. Utility companies need performance metrics that reveal whether cybersecurity strategies are functioning, not just whether policies exist. Key metrics include:

• Policy adherence rates across departments, to verify implementation
• Incident response and containment times, to measure resilience under pressure
• Audit findings and recurrence, to track control effectiveness over time
• Risk remediation timelines, to expose execution gaps

Each metric must have a designated owner and be reviewed consistently, typically through the Cybersecurity Governance Board. Dashboards should focus on trends, outliers, and threshold violations. Reporting is only useful if it leads to action.

Regulators are demanding more than compliance snapshots. Utilities must demonstrate continuous improvement in cybersecurity posture and risk management maturity. Metrics provide that proof. They show whether governance is improving security performance or just maintaining paperwork.

Strong governance is measured by results such as faster response, fewer failures, and reduced exposure. Without metrics, utilities are managing assumptions, not risk.

How Serverless Solutions Support Cybersecurity Governance

Serverless Solutions partners with energy companies to build governance models that deliver measurable improvements in cybersecurity posture, compliance readiness, and operational alignment. Our work starts with strategy. We help define decision rights, clarify escalation paths, and establish risk ownership across IT and OT leadership.

For utilities needing deeper support, our Managed Security Services provide the operational muscle to enforce governance standards. This includes monitoring for cybersecurity threats across critical systems, tracking performance against internal controls, and producing risk reports aligned with board and regulatory expectations.

We don’t apply generic playbooks. Every engagement reflects the realities of the utility sector, including supply chain risk, regulatory deadlines, and persistent vulnerabilities in operational technologies. Our goal is to help utilities close governance gaps with services that scale, report cleanly, and improve both resilience and audit performance over time.

Future Trends in Utility Cyber Governance

Cyber governance in the utility sector is entering a new phase—driven by evolving threats, increased regulatory pressure, and rising stakeholder expectations. Traditional models are no longer sufficient. Utility companies must adapt governance practices to remain resilient, protect critical infrastructure, and meet broader enterprise risk standards.

According to PwC, 83% of executives in the energy and utilities sector now view cyberattacks as a serious or moderate risk to their businesses. This level of awareness is pushing governance onto the strategic agenda, where it belongs.

AI and Automation in Governance

Artificial intelligence is helping utility cybersecurity leaders detect threats and monitor risk indicators across complex environments, reducing reliance on manual policy enforcement. Automated governance tools are improving how utilities monitor vulnerabilities, flag policy deviations, and respond to evolving attack patterns. These capabilities reduce reliance on manual processes and provide better visibility into both IT and OT environments.

As utilities scale digital operations and adopt more connected technologies, automation will play a larger role in sustaining compliance and protecting against both targeted attacks and supply chain vulnerabilities.

ESG and Cyber Risk Disclosure

Environmental, Social, and Governance (ESG) metrics are no longer limited to sustainability reporting. Investors, insurers, and regulators increasingly expect utilities to disclose cybersecurity risk management practices as part of ESG frameworks. This includes how they protect sensitive data, how they respond to cyber incidents, and how they measure cybersecurity performance.

Boards must treat cybersecurity as a long-term enterprise risk with financial, reputational, and operational consequences. Transparent governance models and regular security audits are becoming key indicators of enterprise stability.

Evolving Role of the CISO

CISOs are moving beyond their traditional IT roles into broader governance responsibilities. In many utility companies, the CISO is now expected to report directly to the board, participate in enterprise risk committees, and lead security integration across IT, OT, and physical infrastructure.

This shift requires a new skill set. CISOs must align cybersecurity strategy with regulatory expectations, business continuity, and organizational resilience. They are expected to lead not just security operations, but governance frameworks that ensure accountability, investment, and measurable outcomes.

From Compliance to Performance

Regulatory compliance is still essential, but it is no longer enough. Governance frameworks must now support performance measurement, continuous improvement, and operational readiness. Utilities are incorporating cybersecurity best practices such as real-time incident tracking, continuous risk scoring, and alignment with enterprise KPIs.

The most forward-looking utility companies are already moving toward governance models that embed cybersecurity risk into overall business planning. This reflects a more mature posture—where risk management, resilience, and reliability are built into how decisions are made, not just how audits are passed.

Ready to Build Utility Governance That Actually Works?

Cybersecurity governance is no longer optional for utility companies. It’s the foundation for risk management, operational resilience, and long-term credibility with regulators, investors, and customers.

Governance must be clearly defined, consistently enforced, and embedded across IT, OT, and executive teams. When ownership is fragmented or metrics are missing, even strong security programs fail to deliver lasting impact.

If your utility is ready to strengthen its cybersecurity posture and reduce organizational risk, now is the time to act. Schedule an Advisory Call with Serverless Solutions to start building a governance model that works.