The process of identifying, analyzing, prioritizing, and mitigating risks is at the core of every successful risk management program. For most enterprises, this process is repeated over and over again – and each time, it generates data about the threats to business operations, the risk those threats pose, and the necessary steps toward mitigation.
The question is, what do you do with all of that risk data? How (and where) should you store the information about the risks you’ve identified, analyzed, prioritized, and mitigated; so that your organization is better prepared to face more risks in the future?
What Is a Risk Register?
The answer is simpler than you might expect. A risk register, also called a risk log, is a tool that your businesses can use to document and track risks across your organization. Imagine a spreadsheet that contains a number of fields that are relevant to every risk you can possibly think of; that’s roughly what a risk register looks like.
Building and maintaining a risk register is an important part of risk management – and like so many other parts of risk management, it’s an ongoing process. A risk register can help your business to identify, analyze, prioritize, and mitigate risks before they manifest into real obstacles.
The most effective risk registers include all the information you can glean about each threat that poses risk to your business: the nature of the risk, the level of impact it might have, what mitigation measures are in place to respond to it, and more. A risk register should tell you everything you need to know about every risk identified.
Although each risk register will vary depending on the organization and the scope of its projects, there are a few elements that every risk register templates should include:
- Risk Identification. This could be a name or an identification number that you use to identify the risk. You may want to include a date or a subtitle here as well, if necessary.
- Risk Description. Provide a brief description of the risk to help you determine why the risk is a potential issue. Try to keep the risk description short, providing a high-level overview.
- Risk Category. Assign each risk to a larger category: budgetary risks, external risks, security risks, compliance risks, and so forth. This step will involve evaluating where the risk is coming from and deciding who can help mitigate it.
- Risk Probability.Decide how likely each risk is to occur. You can categorize your risks using qualitative measurements such as “not likely,” “likely,” or “very likely.” You can also use quantitative measurements such as calculated percentages to determine likelihood of occurrence.
- Risk Analysis. Gauge the potential impact that each risk might have on your business. The most common qualitative scale for measuring a scale from “very low” to “very high.” You can also opt to use quantitative measurements as well.
- Risk Mitigation. Also called a risk response plan, your risk mitigation plan should include a step-by-step solution intended to reduce or eliminate the risk, a brief description of the intended outcome, and how your risk mitigation plan will affect the impact of the risk.
- Risk Priority. Determine the priority for each risk by combining the probability of the risk and the risk analysis. You can document priority using a simple numerical scale, such as 1 (low), 2 (medium), and 3 (high).
- Risk Owner. Assign someone in your organization to “own” each risk, to assure that it’s mitigated according to plan. Risk ownership should include the person who is assigned to oversee the risk mitigation plan, plus any additional team members, if necessary.
- Risk Status. This will help you communicate to your team members whether a risk has been successfully mitigated or not. A risk status should be marked as “open,” “in progress,” or “closed,” depending on the status of the risk.
While your risk register should include an owner for each risk you identify, the risk register itself is typically owned by project managers or project stakeholders to assure all of your risk information is stored in a single accessible place. Some companies may choose to employ risk management professionals to manage their risk register for them, but it’s most often a duty that falls on a project manager or team lead for execution.
Risk Registers and Risk Management
Regardless of who owns your risk register, it’s a document that will inform your entire risk management program and will likely affect your organization’s compliance efforts. Whether your organization is required to keep a risk register will depend on your industry and the regulatory requirements it must meet.
Most project governance standards will also require you to define a risk management plan for your project. A risk register is the safest way to assure auditors that you’ve considered every risk and that you have a plan in place to address each one.
Unfortunately, your team members won’t be able to anticipate every risk event that could occur. But by doing your due diligence during the project planning phase and creating a risk register for each new project, you’ll begin building the foundation for a solid risk management plan that’s based on data-driven decisions and designed for the most rapid response to risks.
Benefits of a Risk Register
The biggest benefit of a risk register is the most obvious one: it will enable you to manage your risks in a more strategic way. A risk register can also help you to focus your organization’s resources on the areas with the highest risk, or even convince your business’s decision-makers to invest more resources on preventative security measures that will help prevent future risks.
Other benefits that come along with a thorough risk register:
It will help you identify patterns.
As long as you’re entering information about risks into your risk register for each new project, you’ll eventually end up with an accumulation of data about the threats and system failures that have harmed your business in the past.
This will help you better predict the risks that could hurt your business in the future. It will also help you track how well your team members are responding to these risks, and whether you need to make any changes to your risk mitigation plan.
Tracking all of the risks for each new project will let your organization identify risk patterns and be more prepared to tackle any new risks that might appear in the future.
It will require you to agree on a common scale.
To create a successful risk register, you’ll need input from experts in all areas of your organization. This means that all of those relevant parties will need to agree on a common scale for measuring risks.
Whether you decide to measure risk using qualitative or quantitative scale will depend on what makes the most sense for your business. That said, normalizing a measurement scale across your organization will eventually result in more relevant and uniform information across different areas. This will also provide stakeholders with more tangible data to prioritize risk response activities.
It will give you more confidence.
Relying on the data generated by a risk register will give your company leaders and stakeholders more confidence in the decisions they make. A risk register will allow you to plan for risk responses that are informed by the context of the risk itself.
Comparing detailed risk information with enterprise objectives and budgetary guidance will help your company to make better decisions about where to spend, and why.
It will enforce accountability.
Not only does a risk register require project managers to determine a risk owner for each risk; it also requires risk owners to verify whether the risks they own are being mitigated according to plan.
This will require your team members to check whether certain policies are up-to-date and whether your existing controls are working as designed. Risk owners will also have to communicate with their compliance team or internal audit team to get a better understanding of where their risk management activities and compliance activities intersect.
Maintaining a current risk register will also make it possible for you to produce enterprise-level risk disclosures for compliance audits, formal reports, or(in the case of a significant incident) for regulatory filings and hearings.
Building a Risk Register
To start, consider one of the many risk register templates available online. Whatever structure you decide to use, the key objective of your risk register will always be the same: to log information about potential risks. Try not to get caught up in the details! Only choose the fields that you feel are necessary to communicate the most information about any potential risks to your business or project.
Here are the basic steps you should take to create a risk register:
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Identify risks.
This is perhaps the most important step when creating a risk register because it will inform all of the other steps in this process. The methods you use to identify risks are up to you, but we recommend starting with a risk assessment or a risk analysis.
Both of these methods for risk identification will help you create a list of the existing risks that might affect your business. This list will help to inform the decisions you make about any future risks as well.
This step should also include brainstorming any potential risks with your project team. Every member of your team is responsible for different areas, and you should rely on their individual expertise to identify potential risks in various areas of your organization.
It’s also important that you include any other stakeholders in this step of the process, to make sure that their concerns are heard. Generally, you should use this step to exhaust all the categories that could have a potential impact – from market resources, to the weather, to a cyberattack.
This step will inform the “Risk ID” field in your risk register.
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Describe risks.
Once you’ve identified the potential risks to your business, provide a brief description for each. This risk description should make it easy for anyone to understand the most critical details of each risk. Be as thorough as possible, but try to keep the risk description limited to only the essentials so that it’s not overwhelming.
A description that’s too vague will make it more difficult for your team members to determine whether a risk is a real issue or not. For instance, “the weather” might sound vague and not serious; “hurricane season in N.Y. could cause shipping delays” is clear and compelling. The more detailed description is brief, yet informative enough for someone who isn’t as familiar with the inner workings of your project to understand how the risk could harm your business.
You’ll also need to use this step to determine which risk category each risk falls under. Describing the risk will allow you to better decide how you should categorize risks and eventually assign risk owners.
This step will inform the “Risk Description” and “Risk Categorization” fields in your risk register.
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Estimate the likelihood and impact of risks.
Now you’ll need to estimate all of the ways in which each risk might impact your business so you can develop a strategy to deal with them. This is where your decision to use qualitative or quantitative measurements will matter most.
Deciding the likelihood of a risk is no easy task, and how you execute this step will largely depend on which risk management methodologies you employ throughout your enterprise.
This step will inform the “Risk Probability” and “Risk Analysis” fields in your risk register.
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Create a risk response plan.
Next, decide how you will respond to each of the risks you’ve identified, described, and analyzed. This step will probably require the most time and effort from your project team. Ultimately, your risk response plan should be thorough, but not excessive.
This part of your risk register should be clear and concise, so it’s important that you do your research. If a risk does occur, the risk owner should be able to go straight into action and follow the risk response plan accordingly to mitigate the risk.
This step will inform the “Risk Mitigation” field in your risk registry.
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Prioritize risks.
Generally, not all threats pose the same amount of risk. This step will enable you to better evaluate the level of risk compared to others. Some risks will have a greater impact than others, but it will be up to you to decide which risks should come first and which you should put off.
Each risk priority will come from combining the risk probability and risk analysis measurements from Step 3. Risks with the highest likelihood and potential for impact in many areas should be given the highest priority for mitigation.
This step will inform the “Risk Priority” field in your risk registry.
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Assign risk owners.
Now assign a specific owner to each risk you identify. Make sure you choose someone who is capable of mitigating the risk, and make sure he or she knows that they are responsible for mitigation if the time comes.
This step will inform the “Risk Owner” field in your risk registry.
Creating a risk register using these steps will help you build the foundation for a successful risk management plan. Identifying and mitigating new risks isn’t an easy task, but it’s an essential one. To keep your business on track, you need to perfect your risk registry to the best of your ability.
Minimize and Mitigate Risks with Reciprocity ZenRisk
One of the most efficient ways to make risk identification and mitigation easier for your business is to employ tools that are designed to help.
Reciprocity ZenRisk is an integrated cybersecurity risk management solution designed to provide you with actionable insights to gain the visibility you need to stay ahead of threats and communicate the impact of risk on high-priority business initiatives. Turn the unknown into quantifiable and actionable risk insights with built-in expertise that identifies and maps risks, threats, and controls for you, so you can spend less time setting up the application and more time using it.
A single, real-time view of risk and business context allows you to communicate to the board and key stakeholders in a way that’s framed around their priorities, keeping your risk posture in sync with the direction your business is moving.
Reciprocity ZenRisk will even notify you automatically of any changes or required actions, so you can be on top of your risk posture like never before. Eliminate time-consuming, manual work and streamline collaboration by automating workflows and integrating with your most critical systems.
Plus, Reciprocity ZenRisk is seamlessly integrated with Reciprocity ZenComply so you can leverage your compliance activities to improve your risk posture with the use of AI. Built on the Reciprocity ROAR Platform, the Reciprocity product suite gives you the ability to see, understand and take action on your IT and cyber risks.
Now, through a more proactive approach, you can give time back to your team with Reciprocity ZenRisk. Talk to an expert today to learn more about how the Reciprocity Product Suite can help your organization mitigate cybersecurity risk and stay ahead of threats.
