Jurisdictions and timetables are inevitable for companies with global operations while implementing new regulations. With the number of laws and regulations increasing day by day, it is very important for companies to have an updated framework to combat risks.
Limitations of traditional risk assessment process
In organizations with multiple guaranteed functions, frustration with existing risk assessment processes is common. The reasons are varied objectives, timing challenges, overlapping members, and more. The other problem is that, data generated in isolated processes may be partial in scope, thus resulting in failure to recognize and alleviate risks broadly.
4 steps you must know about collaborative risk assessment –
To build a unified risk assessment process, just having a broad and profound commitment to collaboration across assurance functions is not enough. Instead, organizations need to follow the following four steps in order to achieve a more effective and efficient risk assessment process.
1. Building support
It is very important for a risk assessment stakeholder to generate support for unifying the risk assessment process by discussing the present situation about the organization’s risk assessment with assurance function peers. This discussion should mainly focus on the timing of the risk assessment process, the participants and the reason behind every assessment. Here, experience of the participants matters the most and it will have an adverse affect on the quality of the resulting data. Presenting the business case, both qualitative and quantitative is very important for making the transition to a unified risk assessment.
2. Co-ordinate and work together with clear expectations
Risk assessment is a segment of a larger assurance program within a particular function. Each area will have separate and distinct processes depending on the business needs, varying timelines and regulations. In order to meet everybody’s needs, it is a must to identify ground rules for collaboration.
3.Conduct Risk assessment process together with mitigation
Assurance functions have genuine needs for risk assessment-related info, which also includes meeting regulatory requirements. These assurance function representatives have reasonable concerns. It is identified that if important problems are not mitigated, it could have a major negative impact on the whole organization.
4.Incorporate comprehensive info for reporting
For a successful transition it is vital for a team to report the lessons learned from the unified risk assessment process to all the appropriate stakeholders including the board of directors. When assurance functions join together to host a common and comprehensive risk assessment simultaneously, it not only saves time but also provides repository of information. This information can be used for preparing reports for the board of directors.
It is very important to bear one thing in mind that risk assessment is a cycle. Changes across the business take place constantly and thus, it is an ongoing activity.
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