A crucial part of building a robust and effective enterprise risk management (ERM) program is to perform a periodic review of your organization’s risk management activities. This assessment process is best accomplished using an established risk maturity model, an essential tool to plan and mitigate enterprise risk.
A risk maturity model (RMM) is an assessment tool focused on your organization’s risk culture and risk management program. The model evaluates the extent to which risk management is embedded within the organization, where a high maturity level translates into effective risk management.
Using a risk maturity model is smart ERM. It allows you to see the company’s current situation clearly, and to identify the critical steps necessary to achieve higher maturity levels, which translates into better risk management.
What Is the Purpose of a Risk Maturity Model Framework?
An RMM framework allows a company to benchmark its risk management activities against proven RMM criteria, such as IT or cyber risk. This helps the company to reduce its risks and to protect stakeholders from the consequences of cyber or IT risk gone wrong.
One RMM framework that’s become popular in recent years (an open standard, free for anyone to use) is the Factor Analysis of Information Risk framework, abbreviated as the FAIR framework.
FAIR assesses and quantifies enterprise cyber risk exposure as a dollar value. Led by the non-profit FAIR Institute, the FAIR framework has increasingly become the go-to framework organizations use to evaluate and make decisions about enterprise risk initiatives around IT and cybersecurity.
NIST, the National Institute for Standards and Technology, has even recognized FAIR and mapped it to NIST’s own widely used Cybersecurity Framework, as part of NIST’s own effort to help organizations with cyber risk quantification and management of enterprise information risk.
Risk managers can use the FAIR framework, NIST, and even other standards such as ISO 27005, all to establish a blended risk maturity model that can address your organization’s vulnerabilities.
How Can You Implement a Risk Maturity Model?
An enterprise risk maturity model is a self-assessment tool. It depends on an objective, comprehensive process to evaluate a company’s readiness against potential IT and cyber threats by following prescribed industry frameworks such as FAIR and NIST.
How does one implement an RMM assessment? We can break down that prospect into several components.
ERM process management
Consider how much your business has already incorporated enterprise risk management into its decision-making; as well as your adherence to best practices in assessment, monitoring, and risk mitigation.
Risk appetite management
Measure the overall risk awareness of the company based on risk appetite metrics.
When examining your organization’s overall approach to risk management, spend lots of time considering whether the company tilts toward mitigating the consequences of risk, or remediating root causes. Ideally it should be the latter.
The success or failure of ERM depends on senior management. Assess how seriously the board and senior executives take ERM – the “tone at the top” that reverberates through the rest of your enterprise.
Measure the effectiveness of risk assessments, including risk information collection methods, risk assessment process, and other related elements.
Business resilience and sustainability
Review the inclusion of risk management strategies within business continuity, operations planning, and sustainability activities.
To go through all those components of an RMM assessment manually would be a daunting amount of work, much of which might be inaccurate or incomplete. Manual risk assessment processes are prone to error and can lead to long-term organizational fatigue.
Instead, consider automating your risk maturity assessments. That leads to fewer mistakes, and conserves precious time and resources on such activities.
Evaluate Enterprise Risk Maturity with RiskOptics
Assessing enterprise risk maturity, implementing internal controls, and producing compliance documentation can be overwhelming. RiskOptics can solve that problem.
The ZenGRC is a comprehensive risk management and compliance solution that performs the heavy lifting of periodically evaluating your organization’s risk maturity.
ZenGRC uses workflow tracking and automated task assignment to help you stay on top of all risk assessment and evaluation activities within your organization. The platform is built intuitively, to provide visual dashboards to monitor all your risk maturity activities; but should you need help, support from subject matter experts is included to cover a variety of enterprise risk topics from cyber risk quantification to managing standards-based compliance documentation.
To learn what a comprehensive risk maturity assessment platform can look like, schedule a demo with RiskOptics today.