GV.SC-01: A cybersecurity supply chain risk management program, strategy, objectives, policies, and processes are established and agreed to by organizational stakeholders

GV.SC-01 requires you to formalize a cybersecurity supply chain risk management (C-SCRM) program and get explicit stakeholder agreement on the strategy, objectives, policies, and processes that govern third-party cyber risk. Operationalize it by assigning ownership, defining scope and risk appetite, standardizing third-party lifecycle controls, and retaining recurring evidence that governance decisions are executed. (NIST CSWP 29)

Key takeaways:

• You need documented C-SCRM governance (program + strategy + objectives + policies + processes) and proof stakeholders approved it. (NIST CSWP 29)
• The fastest path is a C-SCRM charter, a third-party security policy, and lifecycle procedures mapped to owners and evidence. (NIST CSWP 29)
• Audit readiness hinges on traceability: decisions → controls → recurring artifacts (intake, due diligence, contracts, monitoring, offboarding). (NIST CSF 1.1 to 2.0 Core Transition Changes)

GV.SC-01 is a governance requirement with operational consequences: it forces clarity on who owns supply chain cyber risk, what “acceptable” looks like, and how third-party cyber controls run day to day. If your third-party risk work is mostly questionnaires and ad hoc exceptions, this requirement will expose gaps fast because it asks for an established program and stakeholder agreement, not informal practice. (NIST CSWP 29)

Treat GV.SC-01 as the “operating system” for third-party cyber risk. It should connect executive expectations (risk appetite, objectives, and priorities) to repeatable actions across procurement, legal, security, IT, engineering, and business owners. Your documentation must show consensus: defined roles, clear decision rights, and a process for resolving conflicts such as “we need this SaaS now” versus “security says no.” (NIST CSWP 29)

For a CCO or GRC lead, the quickest win is to publish a small set of enforceable documents (charter, policy, procedures) and then prove they run on a cadence with measurable outputs: inventory, tiering, due diligence, contracting requirements, monitoring triggers, and exit controls. If you can show that mapping and produce artifacts on demand, you will meet the intent of GV.SC-01. (NIST CSF 1.1 to 2.0 Core Transition Changes)

Regulatory text

Excerpt: “A cybersecurity supply chain risk management program, strategy, objectives, policies, and processes are established and agreed to by organizational stakeholders.” (NIST CSWP 29)

What the operator must do:
You must (1) create a defined cybersecurity supply chain risk management program, (2) document the strategy and objectives that guide it, (3) publish policies and processes that implement it across the third-party lifecycle, and (4) obtain documented agreement from relevant stakeholders (not only security/GRC). The evidence needs to show the program is real: owned, funded or resourced, used by procurement and system owners, and producing consistent outcomes. (NIST CSWP 29)

Plain-English interpretation of the requirement

This requirement asks a simple question: “Can you prove the organization agreed on how it will manage third-party cyber risk, and can you prove you run that program consistently?”
“Established” means documented, implemented, and maintained. “Agreed to” means you can show who approved it and that the approving group had authority and cross-functional representation (e.g., Security, Procurement, Legal, IT, business leadership). (NIST CSWP 29)

Who it applies to

Entity scope: Any organization running a cybersecurity program and relying on third parties that could affect confidentiality, integrity, availability, safety, or resilience. (NIST CSWP 29)

Operational contexts where GV.SC-01 becomes exam-critical:

• Heavy SaaS and cloud dependency (data processors, hosting, identity providers)
• Outsourced IT operations or managed security service providers
• Software supply chain exposure (libraries, build tools, CI/CD providers)
• Regulated outsourcing (financial services, healthcare, critical infrastructure) where examiners expect board-level or executive governance, even if they don’t cite NIST directly

What you actually need to do (step-by-step)

1) Name an accountable owner and decision forum

• Assign an executive accountable for C-SCRM (commonly CISO, CRO, COO, or CIO depending on your model).
• Establish a cross-functional “Third-Party Cyber Risk Council” (or fold into an existing risk committee) with authority to approve policy, accept exceptions, and resolve disputes.
  Deliverable: RACI + committee charter + meeting cadence and minutes template. (NIST CSWP 29)

2) Define scope and third-party population

• Define “third party” broadly: vendors, contractors, consultants, suppliers, partners, and service providers.
• Define which relationships are in-scope for cyber review (e.g., access to data, systems, networks, code, facilities, or operational dependency).
  Deliverable: third-party inventory approach (system of record + required fields) and intake workflow. (NIST CSWP 29)

3) Document strategy, objectives, and risk appetite (minimum viable set)

Write these so procurement and engineering can act on them:

• Strategy: how you manage third-party cyber risk across the lifecycle (select, contract, onboard, monitor, offboard).
• Objectives: measurable outcomes such as “critical third parties are risk-assessed before go-live,” “security requirements are in contracts,” “monitoring and exit plans exist for critical services.”
• Risk appetite: the organization’s tolerance for specific conditions (e.g., no MFA, no incident notice, inadequate subprocessor transparency) and what requires exception approval.
  Deliverable: C-SCRM strategy document + risk acceptance and escalation thresholds. (NIST CSWP 29)

4) Publish enforceable policy (what must be true)

Your Third-Party Cybersecurity Policy should include:

• Scope and definitions (third party categories, criticality tiers)
• Minimum due diligence requirements by tier
• Contractual security requirements baseline (see Step 6)
• Ongoing monitoring expectations and triggers
• Exception process (who can approve, required compensating controls, expiration)
• Reporting and metrics to stakeholders
  Deliverable: policy with version control and formal approval record. (NIST CSWP 29)

5) Build procedures (how it works in practice)

Create procedures that map to the lifecycle:

• Intake + classification: what data/access is involved, criticality tiering, inherent risk rating
• Due diligence: evidence collection, review steps, acceptable substitutes (SOC 2, ISO certificates, attestations), remediation workflow
• Security review for tech onboarding: identity integration, logging, encryption, admin access controls, data retention
• Periodic review: cadence by tier, event-based reassessment, continuous monitoring if used
• Offboarding: access removal, data return/deletion attestations, transition plans for critical third parties
  Deliverable: procedure docs + workflow diagrams + tool configuration notes. (NIST CSWP 29)

6) Standardize contractual controls (make the policy enforceable)

Work with Legal and Procurement to publish a security addendum or clause library aligned to your tiers, including:

• Incident notification and cooperation
• Minimum security controls (access control, encryption, vulnerability management)
• Subprocessor and fourth-party controls (approval/notice rights)
• Audit/assessment rights and evidence obligations
• Data handling (retention, deletion, location, segregation)
• Business continuity and exit support for critical providers
  Deliverable: approved clause set + contract review checklist + playbook for redlines. (NIST CSWP 29)

7) Make stakeholder agreement explicit and provable

Stakeholder agreement is not implied. Capture it:

• Policy approvals (GRC, Security, Legal, Procurement, business leadership)
• Meeting minutes showing discussion and decisions (e.g., tiering model adoption, exception rules)
• Training/communications rollout to affected teams
  Deliverable: approval memo or GRC workflow record + attendee list + change log. (NIST CSWP 29)

8) Map GV.SC-01 to controls, owners, and recurring evidence

Create a one-page control map so you can answer audits quickly:

• Requirement → control statement → owner → frequency → system of record → evidence artifact
  This “traceability spine” is the most reliable way to prevent the common gap: policies exist, but nobody can prove operation. (NIST CSF 1.1 to 2.0 Core Transition Changes)

Practical tooling note: If you run Daydream for third-party due diligence, configure it so each workflow stage (intake, tiering, due diligence, contracting, monitoring, exceptions, offboarding) produces exportable evidence bundles tied to the policy requirement and control owner. That turns stakeholder agreement into repeatable audit output.

Required evidence and artifacts to retain

Keep artifacts in a controlled repository with version history and retention rules.

Governance

• C-SCRM program charter and RACI (NIST CSWP 29)
• Committee membership, meeting agendas, minutes, and decisions (NIST CSWP 29)
• Strategy/objectives/risk appetite statement with approval record (NIST CSWP 29)

Policy and procedures

• Third-party cybersecurity policy (approved, versioned) (NIST CSWP 29)
• Lifecycle procedures (intake, due diligence, contracting, monitoring, offboarding) (NIST CSWP 29)
• Exception process documentation and approval workflow (NIST CSWP 29)

Operational proof

• Third-party inventory export (with tiering/criticality fields) (NIST CSWP 29)
• Sample completed assessments per tier, including remediation tracking (NIST CSWP 29)
• Contract checklist results and executed security addenda for sampled third parties (NIST CSWP 29)
• Monitoring alerts, periodic reviews, and reassessment triggers documentation (NIST CSWP 29)
• Offboarding records: access removal, data deletion/return attestations (NIST CSWP 29)

Common exam/audit questions and hangups

What auditors ask	What they’re really testing	What to show
“Who owns supply chain cyber risk?”	Accountability and decision rights	Charter, RACI, committee minutes (NIST CSWP 29)
“How do you define critical third parties?”	Consistent tiering	Tiering model + inventory fields + examples (NIST CSWP 29)
“Show me you follow your process.”	Operating effectiveness	Evidence bundle for sampled third parties across lifecycle (NIST CSWP 29)
“How are exceptions handled?”	Governance discipline	Exception register, expirations, approvals, compensating controls (NIST CSWP 29)
“How do you manage subcontractors/fourth parties?”	Supply chain depth	Contract clauses + due diligence questions + escalation process (NIST CSWP 29)

Frequent implementation mistakes and how to avoid them

1. Policy exists, but procurement bypasses it.
   Fix: tie intake to purchasing workflow. Require a third-party record ID before purchase order or contract routing. (NIST CSWP 29)

2. No stakeholder agreement evidence.
   Fix: route approvals through a system that logs approver, date, and version; store meeting minutes with decisions and attendees. (NIST CSWP 29)

3. Tiering model is subjective and inconsistent.
   Fix: use a small set of deterministic questions (data type, access level, operational dependency, code delivery). Train requesters and reviewers using examples. (NIST CSWP 29)

4. Questionnaire-only due diligence with no action path.
   Fix: define remediation options: block go-live, implement compensating controls, time-bound remediation plan, or documented risk acceptance. (NIST CSWP 29)

5. Contracts don’t match the policy.
   Fix: publish a clause library with “must-have” vs “negotiable,” plus a redline playbook and escalation rules. (NIST CSWP 29)

Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement, so do not treat GV.SC-01 as a standalone “enforcement citation.” The practical risk is indirect: if a third-party incident occurs, investigators and auditors often look for governance proof that your organization had an established, approved program and followed it. Weak stakeholder agreement and missing operational evidence commonly translate into findings such as inadequate oversight, ineffective risk management, or failure to follow internal policy. (NIST CSWP 29)

A practical 30/60/90-day execution plan

First 30 days (stabilize governance and minimum documents)

• Appoint accountable owner and stand up the cross-functional decision forum. (NIST CSWP 29)
• Draft and route approvals for: C-SCRM charter, strategy/objectives, and a third-party cybersecurity policy. (NIST CSWP 29)
• Define the third-party inventory fields and tiering model; identify the system of record. (NIST CSWP 29)
• Build the control map: GV.SC-01 → owners → evidence. (NIST CSF 1.1 to 2.0 Core Transition Changes)

Next 60 days (make it executable in procurement and legal)

• Publish procedures for intake, tiering, due diligence, and exceptions; train Security, Procurement, and Legal reviewers. (NIST CSWP 29)
• Implement contract clause library and a contract review checklist aligned to tiers. (NIST CSWP 29)
• Stand up an exception register with expirations and recurring review. (NIST CSWP 29)
• Start producing recurring evidence bundles for a sample of active third parties. (NIST CSWP 29)

By 90 days (prove operating effectiveness)

• Expand inventory coverage and complete tiering for the highest-impact relationships first. (NIST CSWP 29)
• Run the full lifecycle on new third parties end-to-end: intake → due diligence → contracting → go-live approval. (NIST CSWP 29)
• Establish monitoring triggers and periodic reassessment rules; document first cycle outputs. (NIST CSWP 29)
• Conduct an internal “mock exam”: pick a critical third party and produce all artifacts from request to current monitoring status. (NIST CSWP 29)

Frequently Asked Questions

What counts as “agreed to by organizational stakeholders” for GV.SC-01?

Show formal approvals and decision records from the groups that must execute the program, typically Security/GRC, Procurement, Legal, IT, and business leadership. Meeting minutes plus policy approval records are strong proof. (NIST CSWP 29)

Do we need a separate C-SCRM program document if we already have third-party risk management?

If existing third-party risk governance explicitly covers cybersecurity supply chain risk with strategy, objectives, policies, and processes, you can package it as the C-SCRM program. Ensure the documentation is explicit and approved by stakeholders. (NIST CSWP 29)

How do we keep this from becoming a questionnaire exercise?

Make due diligence decisions outcome-based: approve, approve with conditions, remediate with deadlines, or require risk acceptance. Tie those outcomes to contracting requirements and go-live gates. (NIST CSWP 29)

What’s the minimum artifact set to pass an audit interview on this requirement?

Provide the charter/RACI, strategy/objectives, approved policy, lifecycle procedures, and a control-to-evidence map. Then show sampled third-party records that prove the process ran. (NIST CSF 1.1 to 2.0 Core Transition Changes)

How should we handle fourth parties (our third parties’ subcontractors)?

Define contractual requirements for subprocessor disclosure and incident cooperation, and require higher scrutiny for critical services. Track key subcontractors where operational dependency or data exposure is material. (NIST CSWP 29)

Where does Daydream fit if we already have GRC tooling?

Use Daydream where you need clean execution and audit-ready evidence across intake, due diligence, exceptions, and monitoring. The value is faster stakeholder reporting and reliable evidence bundles mapped to GV.SC-01 owners and controls. (NIST CSF 1.1 to 2.0 Core Transition Changes)