What is Holistic Risk Management?Published March 6, 2020 • < 1 min read
Holistic Risk Management (HRM) is the practice of an organization’s understanding at a deep level its risk, how risk components fit together, and how grouping risks affect the overall program. Enterprise Risk Management (ERM) is often considered a holistic approach to proactively identify and mitigate risk and is used in conjunction or as a program replacement for HRM.
Risk assessments support HRM by breaking down the traditional risk silos and opening the way for integrated risk management. Operational risk and operational risk management generally lead the pack when it comes to strategizing the risk appetite of cybersecurity organizational leadership.
There are several elements that make up a holistic approach to risk management:
- Organizational structure to understand risk across silos
- Management framework and policy management
- Analysis and measurement framework, or metrics.
The strength of an HRM program starts with enterprise-wide decision-making capabilities. Financial institutions often spend the most time on defining specific risks and developing risk profiles when compared with other industries to understand the impact of risk. Financial impact is one of the key metrics when analyzing or scoring risks. Other risk factors include velocity, likelihood, importance, control strength, and responsiveness. For a systematic way to manage risks holistically, read about Reciprocity’s Advanced Risk Management capabilities within ZenGRC.