“An efficient framework for seeing the whole risk picture Over the past decade, as financial, operational, strategic, cyber, reputational, and other risks have proliferated, organizations have been working on effective responses. Boards have placed risk oversight at the top of their agendas. Senior executives have upgraded the risk management infrastructure. Businesses and IT functions have adopted tools and solutions. Compliance, risk management, and chief audit executives have enhanced their functions’ capabilities.
Yet many management teams, audit committees, and boards still lack a clear, accurate, and comprehensive picture of the truly greatest risks to their organization and of the risk management programs that protect the organization. Ultimately, the purpose of risk frameworks and assurance activities is to strengthen an organization’s controls to preserve shareholder value. From board directors to line managers, everyone occasionally loses sight of why these valuable governance mechanisms exist, relegating them to bureaucratic check-the-box exercises.
The main barriers to creating a comprehensive risk picture are neither technological nor financial but rather organizational, particularly when it comes to risk assurance. The traditional ways in which assurance activities and reporting are organized limit an organization’s visibility into risks and into the effectiveness of its risk management, while creating unnecessary costs and exposures.