Episode 84 — Manage exceptions and deviations without undermining governance credibility (1A1)
In this episode, we are going to talk about a reality that every serious governance program must face: standards are necessary, but exceptions are inevitable. For brand-new learners, an exception can sound like a failure, as if the organization wrote a rule and then immediately broke it. In practice, exceptions and deviations happen for many legitimate reasons, such as legacy systems that cannot meet a requirement quickly, vendor constraints, urgent operational needs, or temporary transitions during modernization. The governance problem is not that exceptions exist, but that unmanaged exceptions quietly turn standards into suggestions, and once people believe standards are optional, credibility collapses. Managing exceptions well means creating a controlled, transparent way to deviate temporarily without losing accountability, without hiding exposure, and without teaching people to bypass governance whenever pressure increases. By the end of this lesson, you should understand what exceptions and deviations are, why credibility is so fragile in this area, and how an enterprise can allow flexibility while still protecting the integrity of its governance system.
Before we continue, a quick note: this audio course is a companion to our course companion books. The first book is about the exam and provides detailed information on how to pass it best. The second book is a Kindle-only eBook that contains 1,000 flashcards that can be used on your mobile device or Kindle. Check them both out at Cyber Author dot me, in the Bare Metal Study Guides Series.
An exception is a formally approved deviation from a policy or standard, usually for a defined period and under defined conditions, because meeting the standard immediately is not feasible. A deviation can be a broader term that includes any departure from expected practice, whether it is approved or not, and governance becomes especially concerned when deviations are informal or invisible. The first beginner insight is that exceptions are not automatically bad, because they can be a responsible way to keep the enterprise operating while acknowledging real constraints. The second insight is that exceptions carry risk, because they represent a known gap, and known gaps are exposures that can be exploited by threats or can contribute to operational failure. Governance credibility depends on whether the enterprise can keep track of those gaps, understand their impact, and control how long they remain open. If exceptions are not managed, the organization may accumulate large hidden exposures that surface only during incidents or audits. Managing exceptions is therefore not about being strict for its own sake; it is about making flexibility visible and accountable.
Governance credibility is fragile because people learn what rules mean by observing what happens when rules are inconvenient. If leaders enforce standards only when it is easy, and then allow quiet bypasses when deadlines are tight, teams will conclude that standards are optional and that the real system is negotiation. Once that belief spreads, compliance becomes performative, meaning people focus on appearances rather than on real control. This is one reason unmanaged exceptions are so damaging: they teach the enterprise that it is acceptable to ignore standards if you can justify it with urgency. Credibility is also damaged when exceptions are granted inconsistently, such as when one team receives flexibility while another team is punished for similar deviations. Inconsistent enforcement creates resentment and encourages people to route around governance rather than cooperate with it. A credible governance program therefore treats exceptions as a formal part of the system, with clear criteria, clear ownership, and clear consequences for failing to follow the exception process. When exception management is fair and transparent, it actually strengthens credibility because people see that governance recognizes reality while still protecting the enterprise.
A practical exception management approach begins with clear criteria for what qualifies as an exception and what does not. An exception should be used when meeting the standard is truly not feasible within the required time, and when the enterprise has a plan to close the gap. It should not be used simply because a standard is inconvenient or because someone wants to avoid the effort of compliance. Criteria often include factors like business criticality, the impact of noncompliance, the existence of compensating controls, and the time required for remediation. For beginners, it helps to recognize that exceptions are a form of risk acceptance, because leadership is deciding to live with a known exposure for a period. That decision should therefore be made by someone with appropriate authority, not by the person who is most inconvenienced by the standard. When criteria are clear, the enterprise can allow exceptions without creating a culture of excuses. Clear criteria also make exception decisions explainable, which is important during audits and post-incident reviews.
Time limits are a central feature of credible exception management, because an exception without an end date is essentially a permanent waiver. Permanent waivers undermine standards because they create two classes of rules, one that applies to some areas and one that does not apply to others. A time-limited exception forces the enterprise to revisit the decision, which is healthy because exposure changes over time. For example, a gap that seems tolerable today may become unacceptable if the service becomes more critical, if threats increase, or if dependencies grow. Time limits also create a management discipline that encourages remediation planning, because teams must plan how to close the gap before the exception expires. This does not mean remediation must be completed instantly, but it does mean the enterprise is consciously managing the path to compliance. When exceptions have clear durations, leadership can see the overall exception population and assess whether the enterprise is improving or drifting. That visibility is part of credibility because it shows the enterprise is not losing control of its own standards.
Ownership and accountability are also essential, because an exception is a decision, and decisions must have owners. The exception owner should be the person accountable for the risk outcome and for ensuring the remediation plan is executed, not just the person who submitted the request. This ownership includes responsibility for monitoring compensating measures, tracking progress, and escalating if remediation stalls. If ownership is unclear, exceptions become orphaned, and orphaned exceptions tend to remain open indefinitely, accumulating exposure. Accountability also means the enterprise expects updates, such as whether milestones were met and whether the exposure has changed. This is where exception management connects to continuous monitoring, because exceptions are part of the risk posture that must be visible over time. When owners are clear, exception management becomes an operational practice rather than a paperwork event. That practice strengthens governance because it ensures known gaps are actively managed rather than passively tolerated.
Compensating controls are a practical tool for managing exceptions without accepting unlimited exposure, and they are often misunderstood by beginners. A compensating control is an alternative measure that reduces exposure while the standard requirement is not met, such as additional monitoring, tighter access restrictions, temporary process checks, or increased review frequency. The purpose is not to pretend the gap does not matter; the purpose is to reduce the likelihood or impact of harm during the exception period. Compensating controls must be realistic and enforceable, because weak compensating controls create a false sense of safety. They should also be documented as part of the exception decision so that everyone understands what is being relied on. Over time, monitoring should confirm whether compensating controls are working, because if they fail, the residual risk may exceed tolerance and leadership may need to change course. When compensating controls are used thoughtfully, exceptions become safer and more acceptable, which allows the enterprise to maintain momentum without abandoning governance principles.
Transparency is another pillar of credible exception management, because hidden exceptions are where governance collapses. Transparency means the enterprise maintains a clear record of exceptions, including what requirement is being waived, why it is being waived, how long it will last, what compensating measures are in place, and who owns it. This record should be accessible to the appropriate governance stakeholders, because leadership must understand the exposure it is accepting. Transparency also supports fairness because it reduces the chance of special deals and quiet bypasses. When exceptions are visible, patterns become visible too, such as repeated exceptions in one area, which can indicate a deeper issue like unrealistic standards, underfunded remediation, or chronic process friction. Those patterns are valuable because they show where governance must improve the system, not just enforce the rule. A transparent exception process therefore becomes a learning tool as well as a control mechanism.
Another important concept is that exception management must be integrated into decision-making, not treated as an isolated process. Exceptions affect risk posture, which affects investment priorities, which affects the enterprise’s ability to meet objectives. If exceptions are managed in a separate system that leaders never review, the enterprise can unknowingly carry high exposure for long periods. A mature approach includes periodic review of exception trends as part of risk governance and performance management, such as reviewing how many exceptions are open, which critical services are affected, and which exceptions are nearing expiration. This allows leadership to allocate resources to close the most important gaps, rather than letting exceptions linger because nobody has time. Integration also ensures that repeated exceptions trigger deeper analysis, because repeated exceptions might indicate a standard that is not fit for the environment or a control that is too hard to implement consistently. When exceptions drive improvement, governance becomes more credible because it adapts to reality while maintaining boundaries.
It is also important to distinguish between planned exceptions and accidental deviations, because the governance response should differ. Planned exceptions are approved and controlled, while accidental deviations are often signs of process breakdown, training gaps, or resource constraints. If the enterprise treats accidental deviations as if they were formal exceptions, it normalizes poor behavior and reduces accountability. If it treats every accidental deviation as misconduct, it creates fear and hiding behavior. A balanced governance approach investigates why deviations occurred, determines whether they should be formalized as time-limited exceptions or corrected immediately, and then addresses root causes so the same deviation does not repeat. This might include improving process clarity, adjusting workload, or simplifying standards to reduce unnecessary friction. The goal is not to punish; the goal is to restore control and prevent drift. When deviations are handled consistently and fairly, people are more willing to report them, which improves visibility and reduces long-term exposure.
To make this concrete, imagine a standard requiring a certain control practice for a critical service, but a legacy component cannot meet that requirement until it is modernized. Without exception management, the team might quietly ignore the requirement, leaving leadership unaware of the exposure. With credible exception management, the team requests a time-limited exception, explains the constraint, proposes compensating measures such as increased monitoring and restricted access, and provides a remediation plan with milestones leading to modernization. Leadership approves the exception at the appropriate level, understanding the residual risk and accepting it consciously. Monitoring then tracks both adherence to compensating measures and progress toward closing the gap, and the exception is reviewed before it expires. If modernization is delayed, leadership must decide whether to extend the exception, increase compensating controls, or change priorities to reduce exposure. This process preserves credibility because standards remain meaningful, deviations are visible, and the enterprise can show it is managing the gap responsibly.
As we conclude, managing exceptions and deviations without undermining governance credibility means allowing flexibility through a controlled, transparent process that preserves accountability and keeps standards meaningful. Exceptions should have clear criteria, clear ownership, time limits, and realistic compensating controls, and they should be tracked and reviewed as part of the enterprise risk posture. Transparency prevents hidden exposure and reduces political favoritism, while consistent enforcement teaches the organization that governance is real even under pressure. Distinguishing planned exceptions from accidental deviations helps the enterprise respond appropriately, correcting drift without creating fear-based hiding behavior. When exception management is done well, it strengthens governance because it acknowledges reality while maintaining integrity, and it turns deviations into opportunities for system improvement rather than into permanent loopholes. If you remember one guiding idea, let it be that flexibility is not the enemy of governance, but unmanaged flexibility is, because credibility depends on the enterprise being able to explain what rules were bent, why they were bent, how the exposure was controlled, and when normal standards will be restored.
