An integrated risk management (IRM) framework paves the way for business success. In the age of digital transformation, innovation is built on the platform of risk-taking. In a recent study conducted by Gartner, a correlation was found between those who shared risks managed to increase innovation effectiveness three times more than organisations who took a risk-adverse position to innovation and development.
As a business field, Integrated Risk Management sits within the Governance, Risk and Compliance area and can be defined as:
“Practices and processes supported by a risk-aware culture and enabling technologies that improve decision making and performance through an integrated view of how well an organisation manages its unique set of risks.” – source, Gartner.
A key distinction in Gartner’s definition of IRM is the integration of strategic risks with business innovation in a controlled and transparent way. The task of integrated risk management often sits as a shared responsibility between the cybersecurity teams, the CISO and the risk/compliance teams.
A little bit about risk versus reward…
Risk is quite a subjective field that is often interpreted differently according to the individual. Deciding on the best way forward is often quarrelsome. It’s easy to look at specific industries as well and see how low their risk tolerance is and equate it to never taking risk at all – traditional finance, for example.
Additionally, when it comes to cybersecurity – it is difficult for businesses and individuals to look at risk in a healthy manner that isn’t associated with failure. As individuals, Security Managers and CISOs can be fearful of losing their positions if a high-profile breach happens. Cybersecurity is notorious for choosing risk aversion entirely, instead of taking advantage of intelligent risk-taking with calculated precision that leaves room for growth, innovation and accessibility.
With these two factors in mind; there is often a delta between risk and innovation that needs to be addressed to form an ‘intelligent risk-taking’ posture.
To truly foster a culture of innovation and “intelligent risk-taking” it is important that the organisation creates and shares cohesive set of risk first practices. In this approach, it’s not just the CISO or the security manager deciding on the risk appetite of the company. Instead; it is the whole business from sales, marketing, c-suite and cybersecurity working in tandem to influence company culture as a whole, create a ‘fail-safe’ environment where strategy is aligned with security, and aligned with innovation.
The core output of this should be a company that is aligned with a proactive risk management strategy that steers away from ‘achieving compliance’ but ‘continual compliance and performance’.
If you’re interested in learning more about maturing your company’s risk function and gaining strategic visibility on your company’s risk profile, sign up to meet with Loop Secure and Archer. Meeting guests will secure 6 bottles of Yarra Valley wine sourced from Wine Selectors.