The most important factor to communicate to senior management during the initial implementation of a risk management program is the desired risk level, which is the level of risk that the organization aims to achieve in order to fulfill its objectives and strategy1. The desired risk level can help to:
Define and communicate the risk appetite and tolerance, which are the amount and type of risk that the organization is willing to accept or pursue in order to achieve its objectives2.
Guide and align the risk identification, analysis, evaluation, and treatment processes, and ensure that the risks are consistent and proportional to the desired risk level3.
Measure and monitor the risk performance and outcome, and ensure that the actual risk level is within the desired risk level, or take corrective actions if needed4.
The other factors are not the most important to communicate to senior management, because:
Regulatory compliance is a necessary but not sufficient factor to communicate to senior management, as it ensures that the risk management program complies with the applicable laws, rules, or standards that govern the organization’s activities and operations5. However, regulatory compliance does not guarantee that the risk management program is relevant and useful for the organization’s specific objectives and strategy.
Risk ownership is a desirable but not essential factor to communicate to senior management, as it assigns the roles and responsibilities for managing the risks and implementing the risk responses to the appropriate individuals or entities within the organization. However, risk ownership does not ensure that the risk management program is effective and efficient in achieving the desired risk level.
Best practices are a useful but not critical factor to communicate to senior management, as they provide the guidelines and standards for designing and implementing the risk management program, based on the experience and knowledge of the industry or the profession. However, best practices do not ensure that the risk management program is suitable and feasible for the organization’s specific context and capabilities.
References =
Desired Risk Level - CIO Wiki
Risk Appetite and Tolerance - CIO Wiki
Risk Management Process - CIO Wiki
Risk Monitoring - CIO Wiki
Regulatory Compliance - CIO Wiki
[Risk Ownership - CIO Wiki]
[Best Practice - CIO Wiki]
[Risk Management - CIO Wiki]
