A Steady State of Managed Risk
Today’s article focuses on best practices and governance principles for how to achieve a steady state of managed risk in your organization. In our earlier article titled, Strategize and build Your Risk Management Program, we emphasized that risk management is not a point in time practice; it is a program. Your program is supported by people, processes, and technologies. Most importantly, it is continuous. Finally, it is a program that operates with a charter, scope, and budget to support the organization.
Below is a list of Guiding Principles for Risk Management we recommend for your organization.
Leadership
Risk management programs start and end with leadership. Without an executive sponsorship stake in the program to support the strategy, budget, and personnel, most programs fail within the first year. Organizations need to invest and accept what the intent of the risk program will bring along with being flexible when the framework adjusts over time.
Culture
Companies that embrace risk management are more successful in maintaining a steady state condition within their program. Even with personal coming and going within the company, the program will stay intact because the risk management culture exists at levels with the organization. A genuine belief in the program will drive continued success even with the constant changes within the risk landscape.
Accountability
Wherever there is risk, there is exposure. A critical component of risk management is accountability. Organizations that embrace risk management programs defacto incorporate a culture of accountability. Accountability sometimes gets confused by blaming someone or a department when risk is exposed. A better approach for setting a healthy risk culture is identifying, communicating, and working with special HEROS to get things done in the organization. Those who are strong influencers in the organization can positively impact your risk exposure and managed risk.
Platform
Because managed risk is not point in time, it must be monitored and evaluated on an ongoing basis. A critical governance principle for your risk management program is the choice of the platform the organization will deploy. WIth the right platform, you will achieve all of the above. In doing so, you will achieve and maintain a steady state of managed risk. Learn more about the C1Risk Platform.