Information classification is a fundamental process in information security governance and risk management. Its primary purpose is to ensure that security controls are applied in a manner that is proportionate to the value of the information and the potential impact of its compromise. This potential impact—covering confidentiality, integrity, and availability—is the definition of business risk. Therefore, aligning the classification scheme directly with business risk ensures that the most critical assets receive the highest level of protection, optimizing security investments and effectively mitigating threats to the organization's objectives.

B. The security policy mandates and defines the classification process, but the classification levels within the policy must be based on business risk.

C. Data retention requirements are an important part of the information lifecycle but are a consequence of classification and legal/regulatory needs, not the primary driver for it.

D. Industry standards provide valuable frameworks and best practices, but they must be adapted to the specific business context and risk appetite of the organization.

1. ISACA

CISA Review Manual

27th Edition. Domain 3: Information Systems Acquisition

Development

and Implementation

Section 3.4.2

"Information Asset Classification." The manual states

"The objective of classification is to ensure that information assets receive an appropriate level of protection... The classification is based on the value of the asset to the organization

its sensitivity and its criticality." This concept of value

sensitivity

and criticality is a direct measure of business risk.

2. ISACA

COBIT® 2019 Framework: Governance and Management Objectives. Management Objective APO14

"Managed Data." The description for this objective emphasizes the need to "Classify data in accordance with its business criticality." This directly links the classification process to the data's importance to business operations

which is a core component of business risk assessment.

3. National Institute of Standards and Technology (NIST)

Special Publication 800-53 Revision 5

Security and Privacy Controls for Information Systems and Organizations. Control Family: Program Management (PM)

Control: PM-11

"Mission/Business Process Definition." The guidance notes that understanding mission/business processes is essential for determining information protection needs. This establishes a direct link between business context (and its associated risks) and the application of security controls

which is governed by classification.