The Harvard Business Review’s article “How to Live with Risks” reveals a common misconception that risk managers have about the sources of their risks, and how they should be conducting risk assessments.
This study suggests that while risk managers spend nearly half their time on legal and compliance related risks, they face a much greater threat of loss events from strategic and operational concerns.
A common business risk assessment mistake is the inability to relate high-level strategic concerns to the particular risks identified at the supervisory level of the organization. While higher-level interviews add value by revealing concerns and goals of senior management, your executives are several layers removed from the risks that effect day to day operations. The best strategy is to get feedback from as many front line individuals as possible, and then aggregate their concerns and assessment scores up to the strategic goals outlined by management. Use our risk management template today to get started.
The result is a more contextual risk assessment process that can be used to develop strategic and board-level risk dashboards that help prioritize resources and mitigate risks effecting your organization’s most important goals.