Business Password and Authentication Policy Template

Why Password Policies Changed

Many older password policies were built around complicated character requirements and mandatory changes every 60 or 90 days. Those rules often produced predictable passwords such as Spring2026!, followed by Summer2026!, while encouraging employees to reuse passwords or write them down.

NIST Special Publication 800-63B-4 takes a different approach. It requires a minimum of 15 characters when a password is used as a single authentication factor, recommends allowing at least 64 characters, rejects arbitrary composition rules, requires screening against commonly used or compromised passwords, and says passwords should not be changed periodically without evidence of compromise.

A modern business policy should also address password managers, multi-factor authentication, passkeys, service accounts, vendor access, employee offboarding and the reporting of suspected credential exposure. Passwords are only one part of identity security.

What a Modern Business Password Policy Should Cover

Long, Unique Passwords

Passwords used by themselves should contain at least 15 characters whenever the system supports that length. Businesses should permit longer passphrases and avoid rules that force employees to add predictable capital letters, numbers or symbols.

Compromised-Password Screening

When employees create or change passwords, supported systems should compare the proposed password against a blocklist of commonly used, expected or previously compromised values. A rejected password should be replaced, not adjusted with a predictable number or symbol.

A Company-Approved Password Manager

Employees should not be expected to memorize a different long password for every account. A business password manager can generate and store unique credentials, control shared access and support cleaner onboarding and offboarding. The password manager itself should be protected with MFA.

Multi-Factor Authentication

MFA should be required for email, Microsoft 365, remote access, administrative accounts, financial systems, cloud storage, password managers and other critical services. Passkeys and FIDO2 security keys provide stronger phishing resistance than SMS or voice codes.

Password Changes Based on Risk

Routine password expiration is no longer the preferred approach. Passwords should be changed promptly when credentials may have been exposed through phishing, malware, improper sharing, unauthorized access or another incident.

Shared, Privileged and Service Accounts

The policy should separate daily-use accounts from administrative accounts, reduce shared logins, and require secure storage and named ownership for service accounts, API keys, automation credentials and other non-human secrets.

Vendor Access and Offboarding

Third-party access should use unique accounts, MFA and least privilege. When an employee, contractor or vendor leaves, accounts should be disabled, MFA methods removed, vault access revoked and affected shared credentials rotated.

AI Systems

Employees should never paste passwords, API keys, recovery codes, authentication tokens or client credentials into public or unapproved generative AI platforms.

A Policy Is Only Useful When It Is Implemented

Downloading a policy does not make a company secure. The requirements must match the systems employees use, and the business needs evidence that password managers, MFA, account controls, training and offboarding procedures are actually working.

This matters when a company is preparing for cyber insurance, responding to customer security questionnaires, pursuing CMMC or NIST SP 800-171 alignment, or building a SOC 2 program. The written policy and the technical environment must tell the same story.

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Frequently Asked Questions

How long should a business password be?

Current NIST guidance requires at least 15 characters when a password is used as the only authentication factor. A password used only within an MFA process may be shorter, but STACK recommends long, unique passwords generated and stored in an approved password manager whenever possible.

Should employees change passwords every 60 or 90 days?

Not solely because a fixed number of days has passed. Passwords should be changed when compromise is suspected or confirmed, when credentials were entered into a phishing site, when malware is detected, or when IT directs a reset after an incident.

Should a password policy require uppercase letters, numbers and symbols?

NIST advises against arbitrary composition rules. Those rules often create predictable patterns. Length, uniqueness, compromised-password screening, failed-login protections, password managers and MFA are more effective.

Does a password policy replace MFA?

No. Passwords are not phishing-resistant. MFA should be required for critical systems, with passkeys or security keys used where supported.

Can this template be used for CMMC, NIST 800-171, SOC 2 or cyber insurance?

It is a strong starting point, but it must be customized. Each framework, contract and insurer may have different control language and evidence expectations. A written policy alone does not prove the controls are implemented.

Official Password and Authentication Guidance

• NIST SP 800-63B-4 password requirements
• NIST guidance for creating and managing passwords
• NIST small business MFA guidance
• CISA guidance for requiring MFA