The risk environment in which organisations operate has changed drastically in recent years, due to a variety of factors such as the COVID-19 pandemic, changes to the work environment, global geopolitical shifts and the emergence of AI. These developments have resulted in an increased prevalence of cyber risks that bring new challenges for organisations when it comes to managing risk. With cyber security threats becoming more prevalent and sophisticated than ever before, It is essential for businesses to be aware of this changing landscape and develop strategies to mitigate potential issues arising from these risks.
Ransomware attacks are becoming increasingly frequent and sophisticated, with a 91% increase from March 2022 to March 2023. This is particularly concerning as ransomware continues to be the main threat actor for organisations, making it essential that businesses implement robust security measures to protect their data and systems.
A survey conducted by PWC with Chief Executives, pointed out that 40 % of global CEOs think that their organisation will no longer be economically viable within ten years and therefore it is extremely important that they reinvent their companies for future.
Having a risk management program in place is essential for any business to ensure security, maintain their reputation, and reduce the potential for financial loss. This systematic process of risk management can be challenging, however, understanding how it works will make the process run more efficiently and effectively as well as will minimize the risks before they become costly problems.
How to implement a continuous Risk Management program in an organization?
A risk management program in an organization involves identifying and assessing potential risks, implementing controls and measures to mitigate those risks, and continuously monitoring and reviewing the effectiveness of those controls. Here are the general steps to implement risk management in an organization:
- Establish a risk management framework: Develop a risk management policy and procedures that outline the roles and responsibilities of individuals involved in the risk management process.
- Identify risks: Identify potential risks that could impact your business, such as financial risks, operational risks, legal and regulatory risks, strategic risks, and reputational risks.
- Analyse and evaluate risks: Assess the likelihood and potential impact of each risk and prioritize them based on their severity.
- Treat and manage risks: Implement controls and measures to mitigate the identified risks. This may involve implementing controls to reduce the likelihood of the risk occurring or to minimize the impact of the risk if it does occur.
- Monitor and review: Continuously monitor and review the effectiveness of your risk management framework and controls. Regularly review your risk management policies and procedures to ensure they remain up-to-date with changes to your business and the external environment.
Overall, implementing risk management in an organization helps to protect the business from potential losses and enhances decision-making, “ It is important to involve all stakeholders and the board in the process and regularly communicate the results of the risk management framework to ensure everyone is aware of the risks that could impact the business”, says Mathieu.
How to translate risk management into business language?
Translating risk management into business language involves identifying and quantifying the potential risks that affect a business and communicating those risks in a way that is meaningful to stakeholders and the board. To do this, it’s important to understand the business context and use language and concepts that resonate with the audience.
In the book The Cyber Elephant in the Boardroom, Mathieu Gorge highlights the importance of understanding the risk landscape as well as bringing the discussion of data security and governance to all security experts and board members.
“This complex landscape means that the discussion around data security and governance needs to involve security experts, legal experts, risk experts, and financial decision makers. More importantly, it means that top senior management and board members must be involved”, he says.
Here are the key points to consider when translating risk management into business language:
- Focus on business outcomes: Instead of just talking about risks and controls, explain how those risks can impact the business and affect its ability to achieve its goals.
- Use financial metrics: Use financial metrics to quantify the potential impact of risks on the business, such as revenue loss, cost of remediation, or impact on customer satisfaction.
- Speak the language of the business: Use terms and concepts that are familiar to business stakeholders and the board members, such as growth, revenue, market share, and competitive advantage.
- Tailor your message to the audience: Different stakeholders and board members have different concerns and priorities, so tailor your message to the audience. For example, executives may be most concerned about strategic risks, while operational managers may be more focused on process controls.
- Use visualization: Use charts and graphs to make risk data more accessible and easier to understand.
As organizations adjust to the ever-evolving threat landscape, senior leadership teams need a functional way to understand and address these threats.
The 5 pillars of security framework is an guide for small to large size organizations that provides a comprehensive approach in building continuous and proactive security and compliance programs. This framework allows key decision makers the ability to demonstrate control over compliance with two questionnaires (25 & 60 questions) which result in a customized template used for producing detailed security & compliance roadmaps. “ The 5 Pillars of Security Framework has been used helping businesses since 2008 to implement cybersecurity and compliance program”, says Mathieu. You can find out more on https://mathieugorge.com/ .
Remember, translating risk management into business language is not just about communicating risk, but also about helping stakeholders make informed decisions about the business. By using the right language and concepts, risk management can become a powerful tool for driving better business outcomes.