How can you align risk reporting with business objectives?

1 Understand your audience

The first step to align your risk reporting with your business objectives is to understand who your audience is and what they need to know. Different stakeholders may have different expectations, preferences, and levels of risk appetite. For example, senior executives may want a high-level overview of the most critical risks and their impact on the strategic objectives, while operational managers may need more detailed and granular data on specific risks and controls. Therefore, you should tailor your risk reports to suit your audience's needs and communicate clearly and concisely the key messages, insights, and recommendations.

2 Define your objectives and metrics

The second step is to define your objectives and metrics for risk reporting. Your objectives should be aligned with your organization's mission, vision, values, and strategy, and reflect your risk appetite and tolerance. Your metrics should be SMART (specific, measurable, achievable, relevant, and time-bound) and provide a clear indication of your risk performance and progress. For example, you may use key risk indicators (KRIs) to measure the likelihood and impact of risks, key performance indicators (KPIs) to measure the achievement of objectives, and key control indicators (KCIs) to measure the effectiveness of controls.

3 Choose your format and frequency

The third step is to choose your format and frequency for risk reporting. Your format should be appropriate for your audience, your objectives, and your metrics, and enable you to present your risk information in a clear, consistent, and engaging way. You may use different formats for different purposes, such as dashboards, heat maps, tables, charts, or narratives. Your frequency should be determined by the nature and dynamics of your risks, your objectives, and your stakeholders' needs. You may report on a regular basis, such as monthly or quarterly, or on an ad hoc basis, such as when a risk event occurs or a significant change happens.

4 Integrate your risk reporting with your business processes

The fourth step is to integrate your risk reporting with your business processes and systems. This means that your risk reporting should be embedded in your planning, budgeting, forecasting, performance management, and decision-making processes, and supported by your data, technology, and governance structures. By integrating your risk reporting with your business processes, you can ensure that your risk information is timely, accurate, reliable, and relevant, and that your risk management activities are aligned with your business objectives and priorities.

5 Review and improve your risk reporting

The fifth step is to review and improve your risk reporting on a regular basis. You should monitor and evaluate the effectiveness and efficiency of your risk reporting process, the quality and usefulness of your risk information, and the feedback and satisfaction of your stakeholders. You should also identify and address any gaps, issues, or challenges that may affect your risk reporting, and seek opportunities to enhance your risk reporting capabilities and practices. By reviewing and improving your risk reporting, you can ensure that your risk reporting remains fit for purpose and adds value to your organization.

6 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?