SOC 2 CC1.2: COSO Principle 2: Board of Directors Demonstrates Independence from Management
What This Control Requires
The board of directors demonstrates independence from management and exercises oversight of the development and performance of internal controls. The board retains oversight responsibility, identifies and accepts its oversight responsibilities, and applies relevant expertise in its oversight activities.
In Plain Language
A board that just rubber-stamps management reports isn't providing oversight - it's providing theatre. This control exists because someone independent needs to be asking hard questions about how the organisation manages risk and internal controls.
In practice, the board should include members who aren't part of the day-to-day management team. These independent directors bring outside perspective and are less susceptible to internal pressures. The board also needs relevant expertise to understand the risks the organisation faces, particularly around information security, technology, and compliance.
Auditors evaluate whether the board structure supports genuine independent oversight, whether members are qualified to assess security and operational risks, and whether the board actively engages with the internal control environment rather than passively accepting management's summaries.
How to Implement
Document your governance structure. If you have a formal board, make sure its charter explicitly states independence from management and responsibility for overseeing internal controls. Define composition requirements, including the proportion of independent directors.
Set clear criteria for director independence. Generally, independent directors should not be current or recent employees, should not have material business relationships with the organisation, and should not have family ties to senior management. Document each director's independence status and review it annually.
Make sure the board includes members with relevant expertise in information security, technology, risk management, or audit. If the current board lacks this, consider appointing advisory members or providing training to existing directors. Document qualifications and relevant experience for each member.
Establish a regular board meeting schedule with standing agenda items covering internal controls, security incidents, risk assessments, and compliance status. Meeting minutes should clearly document discussions, questions raised by directors, and decisions made regarding internal controls.
Create a process for management to report regularly to the board on the state of internal controls - key risk indicators, security metrics, and audit findings. The board should be able to request additional information and engage external advisors when needed.
Set up an audit committee (or equivalent) with a majority of independent members. Give it its own charter, regular meeting schedule, and direct access to internal and external auditors without management present. Document all committee activities and findings.
Evidence Your Auditor Will Request
- Board charter documenting independence requirements and oversight responsibilities for internal controls
- Board member roster with independence assessments and qualifications/expertise documentation
- Board and audit committee meeting minutes showing active oversight of internal controls and security
- Reports provided to the board on internal control effectiveness, security incidents, and risk status
- Audit committee charter with evidence of regular meetings and direct access to auditors
Common Mistakes
- Board is composed entirely of company insiders with no independent directors or advisors
- Board meetings are infrequent and minutes lack evidence of substantive discussion about internal controls
- No board member has relevant expertise in information security, technology, or risk management
- Board relies solely on management-prepared summaries without independent verification or questioning
- Audit committee does not exist or does not meet regularly enough to provide meaningful oversight
Related Controls Across Frameworks
Frequently Asked Questions
Our company is privately held with no formal board. How do we meet CC1.2?
How many independent directors do we need?
Can the CEO also serve as board chair?
Track SOC 2 compliance in one place
AuditFront helps you manage every SOC 2 control, collect evidence, and stay audit-ready.
Start Free Assessment