Why contract management is the foundation of NIS2 compliance

Many believe the NIS2 Directive is solely about IT security and firewalls. In reality, responsibility is shifting from the technical department to the boardroom. Articles 21 and 23 demand effective control over corporate governance and supply chains. Consequently, your contracts with subcontractors are the most effective place to start.

Summary

• NIS2 shifts cybersecurity responsibility from IT teams to executive management and the board.
• Articles 21 and 23 require documented control over both operations and supply chains.
• Contracts are the primary mechanism for allocating and enforcing cybersecurity responsibilities.
• Structured contract management enables visibility, accountability, and audit readiness.
• A contract-centric approach turns NIS2 compliance into a governance advantage.

How contract management links to NIS2

It takes a moment to fully grasp this insight: effective contract management is the most robust foundation for achieving the cybersecurity standards required by NIS2.

At House of Control, we often ask what the following topics have in common with contract management: IFRS 16 lease accounting, cost control, corporate sustainability due diligence (CSDDD), or the Digital Operational Resilience Act (DORA)?

The common denominator is the same as for NIS2. Whether the goal is compliance, mapping, risk management, or control, the contracts a company holds with its subcontractors are the most effective place to begin—and to continue.

For 20 years, House of Control has grown by providing a market-leading platform for contract management. Upon this, we have built sophisticated solutions that give management and the board peace of mind. These tools ensure the company doesn't just comply with demanding regulations, but leverages these processes to become a more robust business.

NIS2 is no different. The directive introduces a new paradigm for cyber risk. Previously, requirements focused on technical controls. Under NIS2, equal weight is placed on governance, accountability, and control over third-party dependencies.

This raises a practical question: where does compliance actually start? Articles 21 and 23 clarify that compliance depends on structure, oversight, and clear lines of responsibility. In this context, contract management becomes foundational, not just for compliance, but for superior risk management.

What do Articles 21 and 23 of NIS2 actually require?

Together, Articles 21 and 23 set the baseline for how cybersecurity must be handled at both the operational and strategic levels.

Combined, these articles turn cybersecurity into a management discipline. Risks must be identified, mitigated, and documented, and leadership must demonstrate they have control over all "moving parts" in the machinery.

Why is contract management critical for Article 21?

Supply chain security is fundamental to complying with Article 21. In practice, this security is defined and enforced through contracts.

Contracts determine:

• Which party is responsible for specific security controls.
• How and when incidents must be reported.
• Audit and verification rights: NIS2 expects you to verify that suppliers are doing what they promised. Without an explicit "Right to Audit" clause, you have no real way to verify security levels.
• Continuity and exit strategies: If a supplier is compromised, the contract must secure your right to retrieve data and migrate the service. Contract management identifies dangerous "lock-in" risks that threaten business resilience.

The "magic" of contract management lies in enriching agreements with structured data and automated alerts. Without this structure, obligations remain fragmented across documents, emails, and legacy agreements. This makes it impossible to maintain a clear risk profile or answer critical questions:

1. Which suppliers support our essential services?
2. Which contracts include NIS2-aligned security requirements?
3. Where do contractual obligations fall short of internal policies?

NIS2 doesn't require the elimination of all third-party risk; it requires that you understand and manage it. That starts with knowing what has been agreed and how it is enforced. How does contract management support Article 23 accountability?

Read more: NIS2 documentation: What auditors expect to see.

How does contract management support Article 23 accountability?

Article 23 mandates that cybersecurity is a leadership responsibility that can no longer be delegated without visibility. Management must document their oversight, requiring reliable insight into how risk is distributed between the company and its subcontractors.

Structured contract management provides leadership with:

• Visibility into third-party dependencies.
• Clarity on where key security obligations reside.
• Assurance that contracts align with internal policies.
• The ability to track exposure as contracts change or renew.

This enables informed decisions based on facts rather than assumptions. Approval under Article 23 is only meaningful when management understands the underlying risk landscape. Contracts provide that factual foundation.

Can compliance be documented without strong governance?

Theoretically, one could rely solely on policies and risk registers. In practice, this is fragile. Regulators will assess whether controls are legally binding and integrated into daily operations. For third-party risk, this means having full control over contracts: structured information, effective overviews, and proactive alerts.

NIS2 also emphasizes proportionality. Organizations must prioritize measures based on risk. Without a clear overview of contractual obligations, these choices are difficult to justify.

Strong contract governance creates traceability:

• From risk assessments to contractual obligations.
• From internal policies to supplier requirements.
• From management decisions to operational execution.

From document storage to active risk management

Traditional contract management often focused on storage and retrieval. Under NIS2, that is insufficient. Organizations now need:

• Structured contract data, not just static documents.
• Clear links between contracts, suppliers, and critical services.
• Continuous visibility into obligations and exposure.
• The ability to report and demonstrate compliance on demand.

When contracts are treated as active governance tools rather than archive records, they become the practical bridge between cybersecurity operations and executive responsibility.

Read more: The NIS2 24-hour rule: Handling incident reporting requirements.

Key takeaways

• Treat contracts as a core cybersecurity control, not an administrative afterthought.
• Use contracts to document, enforce, and monitor supplier-related risks under Article 21.
• Ensure leadership oversight and decision-making are documented in line with Article 23.
• Build continuous visibility into contractual obligations, risks, and dependencies.
• Use structured, digital contract management to move from reactive compliance to proactive control.

Disclaimer: House of Control is a software company. We do not offer NIS2 compliance consulting services. Thus, following this guidance does not guarantee compliance with all NIS2 legal requirements. The content of this article is based on our own research of the NIS2 requirements and our experience with regulatory compliance, and includes inspiration from various actors offering compliance services. We do not assume any responsibility or liability for any failure to comply with NIS2 requirements or resulting from the use of this guidance.