- A risk governance framework identifies and handles risk when several stakeholders are involved.
- The framework has five steps: pre-assessment, appraisal, characterization and evaluation, management, and cross-cutting communication.
- Common IT risk frameworks include CMMC, NIST SP 800-53, NIST CSF, ISO 27001 and 27002, AICPA SOC 2 and EBIOS.
- Choose a framework by your compliance mandates and the security risks your organization faces.
- Frameworks scale to organizations of any size in the public or private sector.
Risk governance framework, often specifically referred to as IT risk governance framework, is used to identify and handle risk when several stakeholders are involved. It is composed of 5 main steps including: pre-assessment, appraisal, characterization and evaluation, management and finally cross-cutting. Pre-assessment includes identification and framing and allows for early detection and warning. Appraisal is to assess the causes and consequences of the risk. Characterization and evaluation is when judgment is made about a risk and how to manage it. Management is deciding on and implementing risk management. Lastly, cross-cutting is a transparent communication with stakeholders. The framework is generic and adaptable so that it is capable of assessing and evaluating important risk issues. This adaptability is crucial because many risk issues are complex and ambiguous.
Examples of risk governance frameworks
There are several different options for IT risk governance frameworks depending on the needs of the organization. A few that are commonly used include Cybersecurity Maturity Model Certification (CMMC), NIST SP 800-53 and NIST CSF, ISO 27001 and ISO 27002, AICPA SOC 2, and EBIOS. Each of these frameworks exhibit specific pros and cons. A framework should be chosen by necessary compliance mandates and the security risks posed to the organization. An effective risk governance framework should include governance, performance and goal management, risk identification and prioritization, risk tolerances and actions, communication, and centralized control activities.
Why is Risk Governance Framework Important?
All changes have accompanying risks. With risk governance framework risks are minimized allowing for optimal benefits from changes without as many negative consequences. With the increased use of social media and technology, new vulnerabilities and risks arise creating need for protection. IT risk governance addresses all aspects of potential risk for an organization, assigns a level of risk to each, and provides roles for members of the organization. Adopting a framework can help organizations continue to grow while mitigating future risk. An effective framework has the ability to deliver results that make a difference in organization performance; they should not just be a list of standards and rules.
How is Risk Governance Framework Used?
IT risk governance frameworks are used to identify various kinds of risk in organizations. There are several different risk frameworks for different types of organizations, but IT risk frameworks are generally used for organizations that develop, use and evaluate IT and AI technologies. The framework creates actionable results based on the organization’s desired risk level, and helps mitigate negative consequences as growth occurs.