To begin your risk management process, you must take an inventory of the risks that exist across your business. Risks can originate from several sources, including third parties, employees, and technology, to name just a few. Assign specific teams to oversee the inventory of risk based on business area, and to categorize and select the top five risks based on overall potential impact to the organization.
There are four major components to managing risk, which should be presented regularly to promote informed decision making. These methods include mitigation, which involves providing a compensatory control to reduce the likelihood or impact of the risk; transference, which is the process of allowing another party to accept the risk on your behalf; acceptance, which involves allowing the systems to operate with the known risk; and avoidance, which is the practice of removing the vulnerable aspect of the system or the entire system itself. The management approach should be determined by a variety of factors such as cost benefit analysis and likelihood of occurrence. Once your teams have determined the top five risks, the approach to managing them can be addressed.