Organizational Risk Management System

A Organizational Risk Management System is a organizational management system to identify, assess, and mitigate organizational risks (supporting risk-informed decision making and operational continuity).

AKA: Enterprise Risk System, Corporate Risk Management System, Risk Control System.
Context:
- It can typically implement Risk Management Framework through system components and risk controls.
- It can typically enforce Framework Standard through monitoring mechanisms and compliance checks.
- It can typically align with Framework Requirements through validation processes and audit trails.
- It can typically support Framework Objectives through risk functions and control capabilitys.
- ...
- It can often enable Framework Integration through system interfaces and data exchanges.
- It can often maintain Framework Consistency through standardized processes and system rules.
- It can often provide Framework Compliance through reporting systems and documentations.
- ...
- It can range from being a Simple Risk Management System to being a Complex Risk Management System, depending on its risk scope.
- It can range from being a Departmental Risk System to being an Enterprise-Wide Risk System, depending on its organizational coverage.
- It can range from being a Framework-Aligned System to being a Custom Risk System, depending on its standard adoption.
- It can range from being a Single Framework System to being a Multi-Framework System, depending on its framework integration.
- ...
- It can integrate Risk Assessment with risk monitoring.
- It can provide Risk Control through assessment methods.
- It can facilitate Risk Response through mitigation processes.
- It can establish Risk Policy through governance frameworks.
- It can enforce Risk Control through systematic oversight.
- It can support Risk Tracking through measurement systems.
- ...
Examples:
- Framework-Based Risk Systems, such as:
  - COSO-Based Systems, such as:
    - Bank of America Risk System (2022) implementing COSO ERM Framework.
    - General Electric Risk System (2021) implementing COSO Internal Control Framework.
  - ISO-Based Systems, such as:
    - Shell Risk Management System (2023) implementing ISO 31000 Framework.
    - Siemens Risk System (2022) implementing ISO 27001 Framework.
- Regulatory Framework Systems, such as:
  - Banking Risk Systems, such as:
    - JPMorgan Chase Risk System (2023) implementing Basel Framework.
    - Citigroup Risk System (2022) implementing Dodd-Frank Framework.
  - Healthcare Risk Systems, such as:
    - UnitedHealth Risk System (2023) implementing HIPAA Framework.
    - Kaiser Risk System (2022) implementing HITECH Framework.
- Proprietary Risk Systems, such as:
  - Custom Enterprise Systems, such as:
    - Goldman Sachs Risk System (2023) for investment risk.
    - Morgan Stanley Risk System (2022) for trading risk.
  - Industry-Specific Systems, such as:
    - Boeing Safety Risk System (2023) for aviation risk.
    - Pfizer Quality Risk System (2022) for pharmaceutical risk.
- Hybrid Risk Systems, such as:
  - Mixed Framework Systems, such as:
    - Microsoft Security Risk System (2023) combining ISO 27001 with NIST CSF.
    - Chevron Safety System (2022) integrating ISO 31000 with custom controls.
- Implementation Cases, such as:
  - Successful Implementations, such as:
    - HSBC Risk System (2020) effectively implementing Basel Framework.
    - Novartis Risk System (2021) successfully integrating FDA Framework.
  - Implementation Challenges, such as:
    - Regional Bank System (2022) struggling with framework compliance.
    - Healthcare Provider System (2021) facing system integration issues.
- ...
Counter-Examples:
- Ad-hoc Risk Management, which lacks framework alignment and systematic approach.
- Siloed Risk System, which fails to integrate framework requirements across organization.
- Compliance Checklist, which focuses on minimal requirements rather than comprehensive risk management.
- Manual Risk Process, which lacks system automation and framework integration.
- Partial Implementation, which incompletely implements framework requirements.
See: Risk Management Framework, Enterprise Risk Management, Operational Risk Management, ISO 31000, NIST RMF, COSO Framework, Basel Framework, Risk Governance System, Compliance Management System.

References

2024-01-03

Perplexity.ai
- Question: Please explain the components, frameworks, and functions of an Organizational Risk Management System, including its core components, framework integration, system variations, key functions, and system benefits.
- Answer: A comprehensive Organizational Risk Management System integrates multiple components to effectively identify, assess, and control risks across an enterprise.
  - Core Components:
    - Risk Identification and Assessment:
      - Centralized risk register and dashboard for tracking and managing risks.
      - Integrated assessment capabilities for thorough evaluation across categories.
      - Risk scoring systems and customizable risk matrices for assessment.
    - Control and Mitigation:
      - Controls tracking and monitoring mechanisms.
      - Automated reminders for control evaluations and reviews.
      - Incident and issue management capabilities for tracking occurrences.
    - Governance and Framework Alignment:
      - Support for multiple frameworks like COSO ERM and ISO 31000.
      - Risk governance processes ensuring employee compliance.
      - Standardized policies and procedures for risk management.
  - Framework Integration:
    - Enterprise-Wide Implementation:
      - Holistic approach covering all organizational levels.
      - Integration with existing management systems.
      - Cross-departmental risk visibility and coordination.
    - Framework Compliance:
      - Alignment with regulatory requirements and standards.
      - Documentation and reporting capabilities.
      - Audit trail maintenance and compliance tracking.
  - System Variations:
    - Scope and Coverage:
      - Traditional systems focus on department-specific risks.
      - Enterprise systems provide organization-wide risk management.
  - Key Functions:
    - Risk Response and Monitoring:
      - Four primary risk responses:
        Risk mitigation through controls.
        
        Risk avoidance through prevention.
        
        Risk transference to third parties.
        
        Risk acceptance within tolerance levels.
    - Performance Monitoring:
      - Continuous monitoring of risk indicators.
      - Regular assessment of control effectiveness.
      - Dynamic response to changing risk environments.
  - System Benefits:
    - Strategic Alignment:
      - Enhanced decision-making processes.
      - Improved achievement of strategic objectives.
      - Strengthened stakeholder trust.
    - Operational Efficiency:
      - Streamlined risk management processes.
      - Improved crisis preparedness.
      - Enhanced regulatory compliance.
- Citations:

[1] https://www.coso.org/erm-framework
[2] https://www.investopedia.com/articles/professionals/021915/risk-management-framework-rmf-overview.asp
[3] https://www.auditboard.com/blog/enterprise-risk-management/
[4] https://hyperproof.io/resource/the-ultimate-guide-to-enterprise-risk-management/
[5] https://visuresolutions.com/risk-management-fmea-guide/traditional-vs-enterprise/
[6] https://www.indeed.com/career-advice/career-development/risk-management-software
[7] https://empoweredsystems.com/blog/five-popular-risk-management-frameworks/
[8] https://en.wikipedia.org/wiki/ISO_31000
[9] https://www.upguard.com/blog/coso-erm-framework
[10] https://sprinto.com/blog/components-of-risk-management-framework/
[11] https://globalriskcommunity.com/profiles/blogs/six-essential-enterprise-risk-management-software-features
[12] https://www.investopedia.com/terms/e/enterprise-risk-management.asp
[13] https://community.trustcloud.ai/article/what-are-two-standard-risk-management-frameworks/

Organizational Risk Management System

References

2024-01-03

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