Governance 101: Why Separation of Duties is Non-Negotiable

Fraud. Waste. Negligence. If your organization isn’t enforcing Separation of Duties (SoD), you’re leaving the door wide open for all three.

Separation of Duties isn’t just another compliance checkbox—it’s a cornerstone of good governance. It ensures that no single person can execute all parts of a transaction or process, preventing unchecked authority, reducing risk, and strengthening oversight. Whether you’re managing financial controls, regulatory compliance, or enterprise risk, SoD ensures the right people have access to do their jobs—while those who shouldn’t, don’t.

By enforcing SoD, organizations bridge silos between departments, ensuring that risk, compliance, audit, and operational teams work together while still maintaining proper oversight. It’s about giving people the access they need to perform their roles effectively—without creating opportunities for error, fraud, or conflicts of interest.

Why Separation of Duties Matters

SoD is about accountability, control, and transparency—not bureaucracy. It’s the safeguard that ensures no single person has excessive control over business functions. Here’s what’s at stake:

✅ Eliminating Fraud: No one should be able to approve, execute, and review the same transaction. That’s how embezzlement happens.
✅ Preventing Errors: Mistakes happen, but SoD ensures they’re caught before they turn into costly disasters.
✅ Ensuring Compliance: Regulations like SOX, GDPR, and HIPAA require SoD to prevent conflicts of interest.
✅ Enhancing Efficiency: With clearly defined roles, teams work together more effectively without stepping on each other’s toes.

If your processes don’t enforce SoD, you’re creating unnecessary risk—and leaving gaps that bad actors can exploit.

Where SoD is Essential in Risk Management

Separation of Duties applies anywhere conflicts of interest or lack of oversight could lead to bad outcomes. In an Enterprise Risk Management (ERM) platform, that means:

• Risk Identification: The person flagging a risk shouldn’t be the one approving it.
• Risk Assessment: Those evaluating risks shouldn’t be responsible for mitigating them.
• Mitigation Planning: The person proposing a control shouldn’t be the one implementing it without oversight.
• Incident Management: Those reporting incidents shouldn’t be the only ones verifying their resolution.

See the pattern? Without SoD, you’re letting the same people create, evaluate, and approve their own work—a clear conflict of interest that leads to unchecked mistakes, abuse, or negligence.

Best Practices for Implementing Separation of Duties

1️⃣ Define Clear Roles and Responsibilities

SoD starts with a clear understanding of who does what. Organizations must ensure that responsibilities are divided so that no one person has unchecked authority over a process. Some key roles include:

• Risk Manager – Oversees risk identification and governance.
• Risk Assessor – Evaluates risk severity and impact.
• Risk Owner – Takes responsibility for risk mitigation.
• Control Owner – Designs and implements mitigation strategies.
• Compliance Officer – Ensures regulatory and policy adherence.
• Auditor – Reviews and ensures controls are functioning correctly.

Best Practice: If someone is responsible for implementing a control, they shouldn’t also be responsible for approving or auditing it.

2️⃣ Implement Role-Based Access Control (RBAC)

A key way to enforce SoD is through Role-Based Access Control (RBAC), which ensures employees only have access to perform their specific job functions—nothing more.

A few key principles of RBAC include:
✔ Least Privilege: Users should only have the minimum level of access required for their role.

✔ Segregation of Duties: Those involved in risk assessment, reporting, and mitigation should have distinct and limited access.

✔ Periodic Access Reviews: Permissions should be reviewed regularly to prevent unnecessary or outdated access.

One best practice for implementing RBAC at scale is to use SCIM (System for Cross-domain Identity Management). SCIM automates and centralizes user provisioning and deprovisioning, ensuring that employees only have the right access at the right time—without IT needing to manually adjust permissions for every role change.

3️⃣ Monitor and Audit for Gaps

Even with strong SoD enforcement, continuous monitoring is necessary to catch potential violations, ensure compliance, and refine role assignments as business needs evolve.

Some best practices include:
✔ Audit Logs: Maintain a detailed record of access changes, approvals, and system activities.

✔ Regular Reviews: Conduct scheduled access control audits to identify and correct conflicts.

✔ Automated Alerts: Use technology to flag potential SoD violations in real-time.

4️⃣ Educate and Enforce SoD Policies

Even the strongest access controls can be undermined by human error or workarounds. Employees need to understand why SoD exists, how it protects them, and what their responsibilities are in maintaining it.

✔ Train employees on SoD policies and security best practices.

✔ Make SoD enforcement a standard operating procedure, not a suggestion.

✔ Enforce consequences for violating SoD policies—whether intentional or accidental.

The Bottom Line

If your organization isn’t enforcing Separation of Duties, you’re not just inviting risk—you’re enabling it. Fraud, errors, and compliance failures don’t happen in a vacuum; they happen when there’s too much trust and not enough oversight.

Strong governance requires clear role definitions, automated role enforcement, and continuous monitoring. When properly implemented, Separation of Duties is a powerful safeguard against financial loss, regulatory violations, and reputational damage.

At the end of the day, Separation of Duties isn’t about restricting employees—it’s about ensuring governance is working as it should. When done right, SoD bridges silos by ensuring teams collaborate effectively while maintaining the necessary checks and balances.