A compensating control, also called an alternative control, is a mechanism that is put in place to satisfy the requirement for a security measure that is deemed too difficult or impractical to implement at the present time.
In the payment card industry (PCI), compensating controls were introduced in PCI DSS 1.0, to give organizations an alternative to security requirements that could not be met due to legitimate technological or business constraints. According to the PCI Council, compensatory controls must:
1) Meet the intent and rigor of the original stated requirement;
2) Provide a similar level of defense as the original stated requirement;
3) Be “above and beyond” other PCI DSS requirements (not simply in compliance with other PCI DSS requirements); and
4) Be commensurate with the additional risk imposed by not adhering to the original stated requirement.
Examples of compensating controls for information technology security include:
Segregation of Duties (SoD) – an internal control designed to prevent error and fraud by ensuring that at least two individuals are responsible for the separate parts of any task. Fraud and error are risks in payroll management. To mitigate that risk, a company might have one employee responsible for the accounting portion of the job and another responsible for signing the checks. However, segregation of duties can be difficult for businesses with small staffs. Compensating controls, in this case, might include maintaining and reviewing logs and audit trails.
Encryption – converting all electronic data into ciphertext and changing cryptographic keys periodically can be difficult and expensive to implement. As is frequently the case, multiple compensating controls may be required to provide security that is equivalent to the control being replaced. Compensating controls in lieu of comprehensive data encryption might include the use of database security applications and services, network access control (NAC), data leak prevention strategies and e-mail encryption.