While creating a risk management process is a vital step for your organization, it won’t be useful unless there’s a solid monitoring program in place. Monitoring a risk management plan involves a number of considerations and steps, from creating a risk register to tracking identified risks and keeping an eye out for new risks over time.
How do you monitor and review risk assessments?
Conducting a risk assessment from both a qualitative and quantitative approach will be extremely useful for your organization’s understanding of potential problems or liabilities in a project or operation within your business.
After the initial assessment, the next step for your risk managers is to develop a risk register to compile information during the risk identification and risk analysis steps.
The risk register should act as a kind of risk roadmap for your organization. The register should include details including the level of urgency, the response priority for that risk, and what those responses should entail.
One useful way to organize a risk register is by categorizing each risk so it can be easily found and monitored. A few common risk categories may include the following:
- Operational: Risks relating to incorrect processes or operational failures
- Budget: Risks that could cause a project or department to exceed its allocated budget
- Information security: Risks that pertain to cybersecurity concerns (i.e. data breaches)
Along with categorizing each risk, assigning the likelihood of that risk—high, medium, or low—will help your risk managers to develop a response plan and prioritize specific risks.
Your risk register should also include the name or title of the person who is responsible for managing each risk. For example, information security risks are typically owned by cybersecurity professionals who can effectively monitor ongoing risks or any new potential threats to data and sensitive information. The risk owner is generally someone involved in project management and who has a holistic view of their departmental nuances.
A thorough risk register will help risk managers stay on top of identified risks and monitor for new threats, and should be referenced frequently throughout new projects or initiatives.
Key steps for monitoring risk
Once you have your risk register established, it’s time to implement your monitoring process. There are a few steps that will help along the way:
- Monitor your risk response plans
- Identify trigger conditions
- Continually analyze for new risks
- Evaluate the effectiveness of your risk management plan
Monitoring your risk response plans
Each risk has its own response plan and risk owner. The risk owner’s responsibility is to implement the response plan for each incident and report back to the company risk manager. Each scenario or incident will require its own careful review to determine whether a new contingency plan should be implemented.
Identifying trigger conditions
It’s important for risk owners and project managers to keep an eye on project risk triggers, which are indicators that an incident has occurred or will occur. By monitoring your trigger conditions, you can be proactive rather than reactive to avoid costly or damaging incidents.
Analyze for new risks
One of the exciting things about running an organization is that business is always evolving. While this is great for growth and innovation, it means risks must always be reevaluated. Be sure to have your risk managers regularly consider how new programs or projects present new risks to the organization, and use the risk assessment protocol to help plan for and mitigate risk where possible.
Even the best risk management plans run into issues occasionally. Schedule consistent evaluations of risk management protocols and response scenarios to determine where your risk managers can make improvements. Risk managers should consult with various project teams to determine the outcome of incidents, and whether changes should be made.
How do you monitor risk control procedures?
Following the above steps will help risk managers maintain control over many organizational risks, but it’s important to have a system of checks and balances in place for ongoing risk mitigation.
For example, much of the risk monitoring relies heavily on reviews and evaluations, so build this into your calendar to ensure adherence. By performing regular risk audits and consulting your risk register on a consistent basis, your organization will be much better poised to reduce the likelihood of risks and handle incidents swiftly and with as little impact as possible.