What is integrated risk management?

Integrated risk management is a set of processes and best practices within an organization, which improve the performance and decision-making of the organization through the integrated views of how the organization manages its risks. 

Each organization has its own programs regarding risk management that help them to not only pass and survive such risks, but also to manage possible future risks. 

If you want to know more on how to deliver improved outcomes with properly integrated risk management, check the following article. 

Why is integrated risk management needed?

In today’s world, the complexity of risks and their volume has made it difficult for organizations to make the right decisions when it comes to avoiding and managing risks. As a result, the achievement of goals and objectives set by organizations fails to be met. In this regard, an integrated risk management framework helps organizations to create a risk management strategy and approach for evaluating, controlling, and monitoring their risks. 

Integrated risk management helps organizations to answer some of the following questions:

• How are the decisions for risk mitigation coordinated?
• What could be the potential outcome if the risk is not managed?
• How will integrated risk management help us towards avoidance of losses and success maximization?

How to successfully implement an integrated risk management process?

In order to successfully implement an IRM process, one should follow the steps below:

• Clearly establish and document all the roles and responsibilities of people involved in risk mitigation 
• Develop the necessary guidelines for risk management
• Identify and evaluate all risks
• Monitor the IRM process and continually review the outcomes

In order to effectively develop and implement an integrated risk management program and achieve the goals and strategies set by the organization, one should be able to conduct comprehensive research, receive several thoughts and support from the top management of the organization, work with all the other colleagues together as a team, and have proper communication. 

What are the main benefits of integrated risk management?

Some of the benefits of integrated risk management include:

• Providing consistent and accurate information regarding risk to the organization and its employees
• Offering organizations the ability to comply with all applicable requirements while having secure data at hand
• Helping organizations recover from unwanted disasters and maintain the risks 
• Helping to identify new opportunities to increase the efficiency of the organization during the process of risk identification and analysis
• Allowing and helping the management of the organization to identify the best options for risk mitigation in line with the risk apatite and strategy of the organization
• Allowing for the system to handle more than one risk, as well as understanding and managing such risks and their interactions

How to build an effective integrated risk management framework?

An integrated risk management framework involves the combination of the best risk management techniques in order to manage current and other future risks that may be faced by an organization. The framework better defines the activities and processes that can be used to manage an organization’s risks and types of reporting that should be used in order to support the process of risk management. 

Some of the tips that would help an organization to establish a well-integrated risk management framework include:

• Taking a holistic approach in regard to risk management – The best way to integrate a proper risk management framework is to see it as a strategic initiative for the growth and achievement of goals and mission of the organization. In this way, starting from the top level of the organization and passing the importance of an integrated risk management framework to others within the organization 
• Prioritizing risks – In order for the organization to better handle all the processes of its business, it is good to prioritize its risks so that the IRM framework shows success as well. Hence, for better technology improvements risks should be prioritized 
• Automating controls – Switching the existing manual controls to automated ones can save your organization time, lower your costs, as well as help you to better mitigate risk

An organization that implements and follows a properly integrated risk management framework can more easily:

• Demonstrate a better ability to handle crises or situations of disruption
• Improve brand reputation
• Improve operational efficiency and lower operational costs
• Achieve higher employee satisfaction
• Have a greater ability to attract and employ top-level talents within the market
• Lower the capital costs
• Lead to timely and high-quality decision-making
• Experience fewer conflicts within the organization

PECB offers several trainings related to risk management through ISO 31000. This standard offers guidelines on principles of risk management and setting a proper risk management framework. The standard helps organizations by providing guidelines on managing every type of risk, for all business activities. 

The following whitepaper elaborates more on the principles and guidelines of risk management based on ISO 31000. 

If you are interested to know more about the certifications and trainings offered by PECB in relation to ISO 31000 scheme, contact us at marketing@pecb.com.

About the author: 

Vesa Hyseni is a Senior Product Marketing Manager for GRC at PECB. She is in charge of conducting market research while developing and providing information related to ISO standards. If you have any questions, please do not hesitate to contact her: marketing.grc@pecb.com.