How can you master risk governance and oversight roles?

1 Define risk governance and oversight

Risk governance is the set of arrangements, processes, and structures that define how risk is managed in an organization. It includes the roles, responsibilities, and accountabilities of the board, senior management, risk function, and other stakeholders. Risk oversight is the process of monitoring, reviewing, and challenging the risk management activities and performance of the organization. It involves providing assurance, guidance, and feedback to the risk owners and managers. Risk governance and oversight aim to ensure that risk management is aligned with the organization's strategy, culture, and values, and that it supports decision-making and value creation.

2 Apply risk governance and oversight principles and practices

In order to effectively manage risk governance and oversight roles, it is important to follow key principles and practices that are widely accepted in the risk management profession. This includes aligning risk governance and oversight with the organization's vision, mission, goals, and values. Additionally, it is important to establish a clear and consistent risk appetite and tolerance that guide risk-taking and risk management. Furthermore, roles and responsibilities should be defined and delegated across the organization with adequate resources and competencies. Risk policies, standards, and procedures should be set and enforced that reflect best practices and regulatory requirements. Lastly, a risk-aware and risk-responsible culture should be promoted that encourages transparency, accountability, and learning.

3 Develop and implement a risk governance framework and a risk oversight process

A risk governance framework is a document that describes how risk governance and oversight are organized and executed in an organization. It includes elements, objectives, scope, and principles of risk governance and oversight, as well as the roles, responsibilities, and accountabilities of the different parties involved. Additionally, a risk oversight process outlines how risk oversight is conducted and reported on a regular basis; this includes activities, methods, tools, and outputs of risk oversight, as well as the frequency, format, and recipients of risk oversight reports. To develop and implement these frameworks and processes effectively, you need to assess the current state of risk governance and oversight in your organization to identify gaps and opportunities for improvement. You must consult with relevant stakeholders to obtain their input and buy-in for the frameworks and processes. Furthermore, you need to design and document the frameworks based on the organization's needs, expectations, and capabilities. It is also important to communicate with stakeholders about the frameworks and processes to ensure their understanding and commitment. Finally, you need to execute and monitor them while tracking their effectiveness and efficiency.

4 Communicate and report on risk governance and oversight activities and outcomes

Communication and reporting are essential for risk governance and oversight roles, allowing you to inform, influence, and inspire stakeholders on how risk management is conducted in the organization. To effectively communicate and report on risk governance and oversight activities and outcomes, you should identify the needs of your target audience and tailor your message accordingly. Ensure that your language is clear, concise, and consistent, avoiding jargon and ambiguity. Provide relevant, reliable, and timely information to support your claims. Utilize visual aids such as charts, graphs, tables, and dashboards to enhance your presentation. Lastly, solicit feedback from your audience and address it promptly.

5 Evaluate and improve your risk governance and oversight performance and maturity

As a risk professional, it's important to evaluate and improve your risk governance and oversight performance and maturity. To do this, define and measure the key performance indicators (KPIs) and key risk indicators (KRIs) that reflect your risk governance objectives and outcomes. Additionally, benchmark your performance and maturity against best practices, standards, and peers. It's also beneficial to identify and analyze the strengths, weaknesses, opportunities, and threats of your risk governance and oversight processes and structures. By implementing action plans to address the gaps, issues, and risks that affect your risk governance and oversight performance and maturity, you can review and update your risk governance framework and risk oversight process to reflect the changes and improvements made.

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?