How can you align risk management across departments?

1 Define a common risk framework

The first step to align risk management across departments is to establish a common risk framework that defines the key concepts, principles, standards, and tools for identifying, assessing, responding, and monitoring risks. A common risk framework should be aligned with the organization's vision, mission, values, and strategy, and reflect the expectations of the stakeholders. It should also be flexible enough to accommodate the specific needs and contexts of each department, while ensuring a coherent and integrated view of the risks across the organization.

2 Communicate and collaborate

The second step to align risk management across departments is to foster a culture of communication and collaboration among the risk owners, managers, and experts. Communication and collaboration are essential for sharing information, insights, best practices, and lessons learned about the risks and their impacts. They also help to build trust, mutual understanding, and accountability among the departments, and to resolve any conflicts or discrepancies that may arise. Communication and collaboration can be facilitated by using common platforms, channels, and languages, and by creating cross-functional teams, committees, or networks.

3 Align risk objectives and indicators

The third step to align risk management across departments is to align the risk objectives and indicators that guide the risk decision-making and performance measurement. Risk objectives and indicators should be derived from the organization's strategic goals and priorities, and reflect the desired level of risk exposure and tolerance. They should also be consistent, realistic, and measurable, and provide a clear link between the risk management activities and the value creation or protection. Aligning risk objectives and indicators can help to ensure that the departments are working towards the same direction and outcomes, and that they can track and report their progress and achievements.

4 Harmonize risk processes and practices

The fourth step to align risk management across departments is to harmonize the risk processes and practices that support the risk management cycle. Risk processes and practices include the methods, techniques, tools, and resources that are used to identify, assess, respond, and monitor risks. Harmonizing risk processes and practices can help to improve the quality, consistency, and efficiency of the risk management outputs and outcomes, and to reduce duplication, confusion, and waste. Harmonizing risk processes and practices can be achieved by adopting common standards, guidelines, templates, and systems, and by providing training, coaching, and support.

5 Integrate risk reporting and oversight

The fifth step to align risk management across departments is to integrate the risk reporting and oversight that provide the feedback and assurance on the risk management performance and effectiveness. Risk reporting and oversight involve the collection, analysis, and dissemination of the risk information and data, and the evaluation, review, and audit of the risk management processes and practices. Integrating risk reporting and oversight can help to enhance the transparency, accountability, and learning of the risk management function, and to identify and address any gaps, issues, or opportunities for improvement. Integrating risk reporting and oversight can be done by establishing common formats, frequencies, and audiences for the risk reports, and by creating a risk governance structure that defines the roles, responsibilities, and authorities of the risk management stakeholders.

6 Review and improve

The sixth and final step to align risk management across departments is to review and improve the risk management framework, culture, objectives, processes, practices, reporting, and oversight on a regular basis. Reviewing and improving can help to ensure that the risk management function is responsive, adaptive, and innovative, and that it can cope with the changing internal and external environment. Reviewing and improving can be done by conducting surveys, interviews, workshops, or benchmarking studies to collect feedback, opinions, suggestions, or best practices from the risk management stakeholders, and by implementing action plans, projects, or initiatives to address the findings and recommendations.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?