Clouds and their associated radiative effects are a large source of uncertainty in global climate models. One region with particularly large model biases in cloud radiative effects (CRE) is the Southern Ocean. Previous research has shown that there are many dynamic “cloud controlling factors” that influence shortwave CRE, and that three important cloud controlling factors over the Southern Ocean are mid-tropospheric vertical velocity, surface thermal advection, and Estimated Inversion Strength (EIS), which have been shown to influence shortwave CRE on monthly timescales. Model errors may thus arise from biases in representing cloud controlling factors (atmospheric dynamics), in representing how clouds respond to those cloud controlling factors (cloud parameterizations), or some combination thereof. This study extends previous work by examining cloud controlling factors over the Southern Ocean on daily timescales in both observations and global climate models. This allows the cloud controlling factors to be examined in the context of transient weather systems, such as extratropical cyclones, and in the context of high pressure quiescent scenes. Composites of EIS and mid-tropospheric vertical velocity are constructed around extratropical cyclones to examine how the different dynamic cloud controlling factors influence shortwave CRE around the cyclone and how similar the model cyclones are to observations. On average, models tend to produce a realistic cyclone, when compared to observations, in terms of the dynamic cloud controlling factors. The difference between observations and models instead lies in how the models’ shortwave CRE responds to the cyclone dynamics. In particular, the models’ cloud radiative effects are too sensitive to perturbations in mid-tropospheric vertical velocity and, as a result, they tend to produce clouds that are too bright in the cold frontal region of the cyclone and too dim in the center of high pressure systems.