The job of risk management does not end once you have completed the process of risk identification and implemented a mitigation strategy. Your risk must be continuously monitored to ensure that your risk landscape has not changed without your notice.
Risk monitoring is an ongoing process. It involves setting up a structure for tracking risk, instituting regular risk reviews, constantly reevaluating your risk management strategy and potentially adjusting your risk mitigation strategies. Through vigilant surveillance of the risk environment, these risk monitoring activities also feed back into your overall risk management: identification of new risks, risk analysis and identification and implementation of new mitigation strategies.
If you take the time to develop and initiate a strong risk monitoring process, you will be able to spot changes in risk before they result in a disastrous event for your company, making the entire process of managing risk more efficient and effective.
Regularity of Risk Monitoring
Risk monitoring should be a continuous activity, whether it happens on a monthly or quarterly basis for your company or for the duration of a specific project. It should not be simply a one-time, annual occurrence. If you are setting up procedures for monitoring hazards or reexamining the procedures you currently have in place, you should look closely at how often risk reviews are built into your process. They need to happen at least on a monthly or quarterly basis, and make a note to focus on the highest priority issues for the company. In a process where many people involved may be interrupting their regular responsibilities, prioritizing risks becomes important.
During a risk review, risk owners report on those risks they’re responsible for and the strategies being followed to mitigate them. During these times, the strategy may be reassessed to ensure that is is still working as desired. If not, risk managers can catch it before it’s too late.
Risk Can Change Over Time
Many factors can change the state of a risk, so it’s important to remember that the mitigation strategy can change, too. The risk could even disappear altogether, and the measures your company is taking could be a needless expense. That’s why risk assessment can’t just happen once during the lifetime of a risk. An important aspect of risk monitoring is periodically reexamining your processes to see if the environment has changed in a way that increases or decreases the impact of any risk or your company.
By reassessing risk continuously, you’ll be able to reevaluate the actions you’re taking to manage it. Taking a look at the strategies you did not implement can also reveal insights about how well your strategy will work moving forward.
Use Risk Triggers to Spot changes
Risk triggers are indicators that signal that a risk has occurred or is about to occur. Triggers – also known as warning signs or risk symptoms – are usually a condition or another event that causes the risk to happen. For example, if you’ve identified high winds as a potential risk, an approaching storm may be a warning sign that a risk event is about to occur. By keeping an eye out for triggers, you can anticipate and prepare for a potential issue. It’s also a reliable signal that makes risk monitoring much simpler and less time-consuming.
To make the process more predictable and give you more reaction time, take the time to identify risk triggers. Typically, they’re identified during risk analysis. Risk monitoring becomes much more difficult when these triggering events or conditions are unknown. The occurrence of the risk will come as a total surprise, and you will have a much more difficult time mitigating the negative effects of it.
Identifying Risk Triggers
A reliable method for identifying a risk trigger is to first identify the root cause of the risk. For example, let’s say you’ve assessed the risk of building safety issues. While analyzing the risk, you determine that the reason – the root cause – for this is that the building does not have suitable emergency exits. A trigger for this risk could be that the building is not evacuated in enough time during a fire drill. Once you’ve established the root cause, identifying possible triggers becomes a straightforward process. In many cases, triggers are obvious, such as with the previous example of high winds. The root cause of high winds is obviously a weather event. By monitoring the weather, you’ll easily be able to anticipate the risk of strong winds.
Redefining Your Risk Strategy
Through effective risk monitoring, you will be able to spot changes in risks. When changes in risk are spotted, you still may not require a change in strategy. However, in cases that action is required, you must also decide at this time if you are simply reevaluating the risk mitigation strategy or reassessing the risk altogether. You may also not require an entire change in strategy but simply to alter how you implement your current strategy. For instance, if you are following a strategy of risk avoidance, and through review have found the hazard exists in a new area, you only need to adjust your avoidance strategy to include this additional area.
The most important thing to remember during risk monitoring is that your risk landscape is always changing. To have a successful risk management process, be prepared to adjust your activities in response to changes. If you can anticipate changes before they occur, you’ll be that much more successful.
Continue Effective Risk Monitoring with ComplianceBridge
An important aspect of effective risk monitoring is the identification of new risks. As your company grows and evolves, new risks are certain to develop along with it. With TotalCompliance Risk by ComplianceBridge, you have the tools to quickly build assessments.
A variety of questions types gives you flexibility, and you can also weight specific answers and create conditional questions to improve scoring. Automated distribution ensures assessments reach the right people, and with the ability to assign parts of your assessments to specific individuals, groups or departments in your company, you can fully leverage your experts. As the results come in, you can review them in real-time – even down to the question – and begin analyzing this data. All data generated through TotalCompliance Risk can be exported, as well, extending the analytical and reporting possibilities.
Maintain an ongoing process of risk monitoring and updating your list of risks through our powerful system. Request a demo with the experts at ComplianceBridge today.