What are the Five Elements of Risk Management?

What are the Five Elements of Risk Management?Author “Rivky Kappel”What are the Five Elements of Risk Management?
Rebecca KappelRebecca Kappel Staff asked 1 year ago

1 Answers
Rebecca KappelRebecca Kappel Staff answered 1 year ago
Risk management is a set of operations, their sub-processes, and supporting digital tools, that improve business decision-making and corporate performance through the lens of risk management. The risk management process is a far cry from ticking off compliance checkboxes; rather, it plans for a risk-aware culture throughout an entire organization and encourages working together with technology to achieve its goals.

Risk Management Plans Have These 5 Elements in Common:

Strategy

Creation and implementation of an integrated risk management framework which includes effective governance policies and risk ownership

Assessment

Identification, evaluation, and prioritization of risks

Response

Practical risk management steps that include identification and implementation of tools and strategies to manage and mitigate risk

Communication and reporting

Development of a process to inform stakeholders of an enterprise’s risk response strategies

Monitoring

Identification and implementation of a monitoring operation that checks that governance objectives are being met and the effectiveness of risk mitigation strategies

The Benefits

The benefits of an integrated risk management framework are multifold. We’ll outline a couple of them here.

  • Lower cost of compliance and audit preparation and cut out redundant compliance tasks
  • Automated risk mitigation techniques
  • Link business strategy and IT risk landscape.
  • A cyber-aware business culture that maximizes positive risks
  • Significantly reduced fraud, remediation, and legal fees
  • Rapid decision-making

What are Some Functions of Risk Management Software?

Centralized data collection

Integrated risk management applications collect data in a central location, which makes it easier to process and visualize data coming from all departments.

Risk analysis and assessment

Upon collecting the data, IRM software incorporates risk and dependencies into a risk assessment, producing actionable insights in real-time. Real-time data analysis enables faster and better decision-making. More information means better insights, and better insights mean more valuable reports.

Control

This function establishes different priorities and responsibilities. It also ensures that the company follows compliance rules.

Monitoring

All established risk management processes make it easy to track and monitor for quality.


Reporting

Companies have access to real-time, personalized reports that allow them to make decisions and take action whenever changes occur.

Related Content

Authorization to Operate (ATO)

Authorization to Operate (ATO)

What is an ATO? An ATO is a hallmark of approval that endorses an information system…
StateRAMP

StateRAMP

What is StateRAMP? In 2011, the Federal Risk and Authorization Management Program (FedRAMP) laid the groundwork…
Segregation of Duties

Segregation of Duties

What is the Segregation of Duties? Segregation of duties (SoD) is like a game of checks…
Skip to content