Your risk assessment methodology must align with the foundations of your business. What does it mean?
This is about how you can put in place essential items to help strengthen your risk assessment methodology.
This includes:
- taxonomies: you should define the common risk categories used throughout your business to provide a clearer picture of what needs to be measured and mitigated.
- terminology: the appropriate risk rating needs to be determined, a consistent rating system provides clarity and streamlines the risk management process.
- stakeholders: they include more than just the members of the risk and compliance team, and everybody in the firm has a role in managing risk, and everybody should be identified accordingly.
- process: once the firm is measuring risk, it then needs to determine the ground rules for evaluating the impact and prioritization of the risks identified.