Risk management is the process of identifying, monitoring, and managing potential risks and their negative impacts on a business. These risks can range from data loss, cyberattacks, and security breaches, to system failures and even natural disasters.
Due to the potential harm these risks can have on a business, it’s critical for information security teams to create and implement risk management processes and plans for their organizations that identify these possible risks, as well as the appropriate steps that can be taken to prevent them from happening.
The typical risk management process consists of three parts, assuming that risk appetite and scoring mechanics have been defined and there is involvement from all levels of the organization. The first step is the identification and analysis of an organization’s exposure to potential risks that could impact its day-to-day operations, including estimates of the damage those events could have on its revenue and reputation.
Risk analysis should include risks, threats and vulnerabilities. Once this has been done, a risk evaluation should take place that compares risks against existing risk criteria such as associated costs and benefits, legal requirements, and system malfunctions.
The final step is making risk treatment choices, e.g., accepting the risk or implementing policies and procedures and related control activities that will help avoid or minimize risks.
Risk management is an ongoing process and doesn’t end once your risks have been identified and remediated. In fact, your organization’s risk management practices should be revisited every year to ensure policies, processes, and risks are up-to-date and relevant.
Here are five best practices to keep in mind as you create and deploy your organization’s risk management plan:
- Implement Risk Accountability for every employee. Creating enterprise-wide accountability will help incorporate risk-based thinking into your day-to-day activities, while also promoting a beneficial, risk aware culture.
- Champion Risk from the Top, as senior management needs to be ‘on board’ for your risk management plan to be truly effective.
- Conduct Regular Risk Assessments to keep your risk profile (or cyber risk profile) up to date, and ensure your business leaders have the most current information before making decisions that could impact your organization’s risk profile.
- Quantify & Prioritize Risks, including their probability and impact, as well as mitigation costs so you know best where to maximize the return on investing in risk treatments, including your compliance program.
- Implement Risk Treatments, including strong controls, metrics, and management tools to help with ongoing risk management and the active reduction of your top priority risks.
To learn more about how to build a strong risk management program that enables you to achieve business-critical infosec compliance and cyber risk management for your organization, check out our recent webinar: Beginning Your Risk Program.