Make the Most of Your Risk Register with These Tips
“What is a risk register?” you might ask. A risk register is likely something that everyone has heard about at some time, but not everyone knows what they are, or what purpose they serve. Understanding the answer to this question is crucial in minimizing vulnerabilities and maintaining the overall health of your business.
Used in the process of risk assessment and risk management, a risk register acts as a record of potential risks that a company could face. Typically, a digital tool, a risk register is filled out during a risk assessment – something oftentimes conducted internally, by a team assembled by the business. During such an assessment, the assessment team looks over the possibility of the business being affected by various damages.
Potential vulnerabilities that a business can be at risk for include cybersecurity vulnerabilities, financial risks, reputation risks, and third party risk. Once an assessment team sees how vulnerable a business is to a potential risk, this is recorded in the risk register.
Read on to see how a business can fill out and utilize a risk register.
How To Identify a Risk
A risk for a business is identified through a risk assessment. These assessments can be conducted through third-party organizations, or internally with a team tasked with identifying and recording potential risks.
These risk assessments can be conducted with the use of questionnaires and similar tools. A business can invest in these tools to ensure that their risk assessment is as thorough and accurate as possible. Research on various relevant topics could also help uncover risks. As an example, conducting research on a demographic that the company targets could help identify holes in the way that the company is reaching these demographics – a potential financial and reputational risk. Catching these holes could ultimately save the company from issues down the line.
Seeing as risk assessments are usually not conducted on a regular basis, a risk assessment team should ensure that no stone is left unturned during their assessment. Doing so could still leave huge vulnerabilities within the company, while simultaneously giving the company a false sense of security. These risks could remain undetected for months or even years until another assessment is conducted.
What Should be Included in a Risk Register?
A risk register should be incredibly comprehensive. As much information as possible should be included in the register, as it will be used not only during the assessment process but in future risk assessments.
Registers should include information on each risk, including as much identifying information as possible. Risk registers should, at the very least, include some form of identification to help members identify the risk. This could be an identification number or a unique name given to the risk. In addition, categories should be created to organize the risks; that way when risks are identified, they can be organized properly. A company should keep the list of categories small to keep the system efficient.
A description of the risk should also be included, such as what the risk could do and the damages it could cause to the company. As many relevant details as possible should be included in the description. The description should also be used as a springboard to help categorize the risk as well.
Additional information and statistics should also be included. This supplementary information should consist of the probability that each risk could affect the company as well as how high of a priority each risk is. This information can help a company decide which risks should be addressed first, and which are less important and can be dealt with at a later date.
Once all this information has been collected and recorded, the final pieces of information that should be included in a risk register should be responses to each potential risk. Once a company has identified every feasible risk that it could face in the future, it’s imperative that they begin to put measures in place to prevent the risks from becoming reality. A risk assessment team should also include a time frame on how long each resolution would take. By providing suggestions and timelines on how each risk can be resolved, the risk assessment team could save their company time and money that would have been wasted developing solutions or estimating how long each resolution would take.
The risk assessment team tasked with identifying and organizing risks should also put together suggested ways that each risk can be addressed. For example, if the team identified a cybersecurity risk showing the company’s vulnerability to hacking, they could suggest that the company invest in stronger cybersecurity measures focused on preventing hacks.
Who Else Should Review the Risk Register?
The risk register should be made available to all supervisors and departments that will be involved in the mitigation of each risk presented in the register.
Supervisors should review the assessment to see which risks have been identified as being high-priority risks, and which others require immediate attention. Once these decisions have been made, each supervisor should alert relevant departments on what each risk is, and steps needed to curb such risks. It is crucial that only relevant departments know about certain risks; by making each department aware of every risk, it could affect productivity as well as office morale as each department sifted through the register.
The methods identified by the risk assessment team should also be taken into consideration while a company is addressing risks. The team should be making basic suggestions on how each risk could be remedied, and who could carry out each fix. As such, a company saves time and resources by using such suggestions as a framework while each risk is being addressed.
risk registers are an absolute necessity when it comes to risk management and conducting risk assessments. Not only do they keep information organized while an assessment is being conducted, they also serve as a long-standing record of potential risks. This can be a useful tool for a company for many years, as potential risks are monitored and resolved before they can become expensive, damaging problems.
