Security Issues in Leased vs. Owned Property

Oct. 27, 2008

Objective: To influence the company's decisions to lease or own property by pointing out differences in unresolved security deficiencies in various locations.

Results Sought: In this example, our CSO wants to make clear that many of the company's leasing arrangements lack risk-based due diligence or lease terms appropriate to a standard of protection enjoyed by owned space. This dichotomy needs to be addressed. The CSO wants to put management on notice that the leasing and fit-up strategy requires significant overhaul, and greater attention needs to be paid to addressing the resolution of security audits in general.

Risk Management Strategy: A proactive risk management program seeks to identify vulnerabilities that could be exploited and contribute to a variety of risk exposures. This company has located its various operations in a combination of leased and owned property, and the decision to lease often driven by cost and logistics.

Security has analyzed its properties in four major operational regions and uncovered a number of security deficiencies that run counter to security policy and could be exploited by knowledgeable adversaries. The assessment process also ranks each deficiency according to potential consequences to life safety, business interruption and/or financial loss. The risk ranking strategy at work here has identified a total of twice as many deficiencies at leased properties as owned properties and has found a total of 23 serious unresolved deficiencies at two of the leased locations.

Each site has received a briefing and documented survey and is responsible for addressing these deficiencies on a prioritized basis. Follow-up assessments have revealed a number of issues that have not been addressed as required. Security has determined that the continuing non-conformance of leased spaces is due primarily to the absence of pre-site-selection risk assessments and directly related remedial requirements in lease agreements.

In the past, the security department has allowed the business units to continue without remedial action for a protracted period before handing the issue off to a more visible process of resolution. The CSO now questions this previous approach. He or she plans to take this information to each site manager before escalating to the senior executive responsible for business operations or to Internal Audit, which requires a far more visible and measured response. The CSO hopes to resolve these issues short of this higher notification.

Where Is the Data? Security routinely performs security audits at all locations housing company operations to confirm compliance with security policy. The data for this metric is a product of these documented, scheduled, policy-based security assessments. In this case, security also obtained data from the outsourced real estate vendor and Corporate Real Estate that showed lack of communication between the various entities.

George Campbell is emeritus faculty of the Security Executive Council and former CSO of Fidelity Investments. His book, Measures and Metrics in Corporate Security, may be purchased through the Security Executive Council Web site, The information in this article is copyrighted by the Security Executive Council and reprinted with permission. All rights reserved.