What is a Risk Governance Framework?

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 Framework 

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 800 - 53 and NIST CFS, ISO 27001 and ISO 27002, AICIPA 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. 

Risk Governance Framework FAQs

How do I get started with a risk management framework? The first step is to prepare by identifying key management roles and who will fill them, creating a risk management strategy, deciding the level of risk tolerance, completing an organization-wide risk assessment, and identifying common controls. Starting with these steps will create an excellent foundation for implementing a framework. 

Who are the intended users of risk governance frameworks? These are useful for organizations that develop and use IT and AI systems. Language included in the framework will be best understood by this audience. Frameworks are scalable to meet the needs of any size organization within the public or private sector. IT risk governance frameworks are highly customizable to ensure that security risks can be measured and minimized. 

What are the different steps in the risk management framework? The steps are to categorize the information system, select appropriate security controls, implement the previously decided controls, assess, authorize information systems, and monitor.