Framework Thinking for Risk Management - toolthinker.com
Risk Management frameworks, models and tools provide systemic approaches to identify, assess, mitigate, and monitor risks within organizations. They help organizations proactively manage uncertainties and potential threats to minimize negative impacts and optimize opportunities. Commonly used risk management frameworks, models, and tools include:
COSO ERM Framework
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management (ERM) Framework provides a comprehensive approach to identify, assess, and manage risks across an organization, emphasizing the integration of risk management into strategic decision-making.
ISO 31000
This international standard outlines principles, framework, and process for effective risk management, including risk identification, assessment, treatment, and monitoring.
Risk Assessment Matrix
A matrix-based tool that evaluates and prioritizes risks based on their likelihood and impact, helping organizations focus on high priority risk and allocate resources accordingly.
Failure Mode and Effects Analysis (FMEA)
A systemic approach to identify potential failures in process, products, or systems, assess their impact, and prioritize actions to mitigate risks.
SWOT Analysis
Assesses an organization’s internal strengths and weaknesses, as well as external opportunities and threats, to identify strategic priorities and align resources accordingly.
Bowtie Analysis
A visual risk assessment tool that depicts the relationship between hazards, potential consequences and preventative and mitigating control design.
Scenario Analysis
Evaluates potential future scenarios and their associated risks allowing organizations to develop contingency plans and response strategies.
Risk Registers
Documented databases or spreadsheets that record identified risks, their likelihood and impact, risk owners, mitigation measures, and progress tracking.
Key Risk Indicators (KRIs)
Quantifiable metrics used to monitor and measure specific risks, providing early warning signs and enabling proactive risk management.
Risk Heat Maps
Visual representations that categorize and communicate risks based on their likelihood and impact, facilitating risk prioritization and decision-making.
Monte Carlo Situation
Utilizes probability distributions and multiple iterations to model uncertain financial variables, enabling a range of potential outcomes and risk assessment.
Risk Control Self-Assessment (RCSA)
Involves engaging employees and stakeholders tp assess risks within their areas of responsibility, promoting risk awareness and accountability.
Incident Reporting and Investigation System
For reporting, investigating, and analyzing incidents and near-misses to identify underlying risks and implement corrective actions.
Business Impact analysis (BIA)
Identifies critical business processes and assesses their vulnerability to disruptions, helping prioritize risk mitigation efforts and develop business continuity plans.
Continuous Risk Monitoring
Tools and technologies that facilitate ongoing monitoring of risks, such as automated risk dashboards, real-time data analytics, and early warning systems
