Risk Mmc

In collaboration with the private and public sectors, NIST has developed a framework to better manage risks to individuals, organizations, and society associated with artificial intelligence (AI). The NIST AI Risk Management Framework (AI RMF) is intended for voluntary use and to improve the ability to incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, services, and systems.

Released on January 26, 2023, the Framework was developed through a consensus-driven, open, transparent, and collaborative process that included a Request for Information, several draft versions for public comments, multiple workshops, and other opportunities to provide input. It is intended to build on, align with, and support AI risk management efforts by others.

Risk Mmc

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The National Risk Index is a dataset and online tool to help illustrate the U.S communities most at risk for natural hazards. The Index leverages available source data for 18 natural hazards, social vulnerability, and community resilience to develop a baseline relative risk measurement for each U.S county and Census tract.

The Breast Cancer Risk Assessment Tool (BCRAT), also known as The Gail Model, allows health professionals to estimate a woman's risk of developing invasive breast cancer over the next five years and up to age 90 (lifetime risk).

The tool uses a woman's personal medical and reproductive history and the history of breast cancer among her first-degree relatives (mother, sisters, daughters) to estimate absolute breast cancer risk-her chance or probability of developing invasive breast cancer in a defined age interval.

The tool may underestimate risk in Black women with previous biopsies and Hispanic women born outside the United States. Because data on American Indian/Alaska Native women are limited, their risk estimates are partly based on data for White women and may be inaccurate. Further studies are needed to refine and validate these models.

Although a woman's risk may be accurately estimated, these predictions do not allow one to say precisely which woman will develop breast cancer. In fact, some women who do not develop breast cancer have higher risk estimates than some women who do develop breast cancer.

Risk management is the process of identifying, assessing and controlling threats to an organization's capital, earnings and operations. These risks stem from a variety of sources, including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.

A successful risk management program helps an organization consider the full range of risks it faces. Risk management also examines the relationship between different types of business risks and the cascading impact they could have on an organization's strategic goals.

This holistic approach to managing risk is sometimes described as enterprise risk management because of its emphasis on anticipating and understanding risk across an organization. In addition to a focus on internal and external risk threats, enterprise risk management (ERM) emphasizes the importance of managing positive risk. Positive risks are opportunities that could increase business value or, conversely, damage an organization if not taken, as the companies disrupted by Amazon, Netflix and other born-digital powerhouses will attest.

"We don't manage risks so we can have no risk. We manage risks so we know which risks are worth taking, which ones will get us to our goal, which ones have enough of a payout to even take them," said Forrester Research senior analyst Alla Valente, who specializes in governance, risk and compliance (GRC), third-party risk management, ERM and other risk-related topics.

Thus, a risk management program should be intertwined with organizational strategy. To link them, risk management leaders must first define the organization's risk appetite -- i.e., the amount of risk it is willing to accept to realize its objectives. Some risks will fit within the risk appetite and be accepted with no further action necessary. Others will be mitigated to reduce the potential negative effects, shared with or transferred to another party, or avoided altogether.

Every organization faces the risk of unexpected, harmful events that can cost it money -- or, in the worst case, cause it to close. This guide to risk management provides a comprehensive overview of the key concepts, requirements, tools, trends and debates driving this dynamic field. Throughout, hyperlinks connect to other TechTarget articles that deliver in-depth information on the topics covered here, so be sure to click on them to learn more.

Risk management has perhaps never been more important than it is now. The risks that modern organizations face have grown more complex, fueled by the rapid pace of globalization. New risks are constantly emerging, often related to and generated by the now-pervasive use of digital technology. Climate change has been dubbed a "threat multiplier" by risk experts.

A recent external risk that initially manifested itself as a supply chain issue at many companies -- the COVID-19 pandemic -- quickly evolved into an existential threat, affecting the health and safety of employees, the means of doing business, the ability to interact with customers and corporate reputations.

Businesses made rapid adjustments to the threats posed by the pandemic. But, going forward, they are grappling with novel risks, including the ongoing issue of how or whether to bring employees back to the office, what can be done to make supply chains less vulnerable, inflation and the business and economic effects of the war in Ukraine.

In many companies, business executives and the board of directors are taking a fresh look at their risk management programs. Organizations are reassessing their risk exposure, examining risk processes and reconsidering who should be involved in risk management. Companies that currently take a reactive approach to risk management -- guarding against past risks and changing practices after a new risk causes harm -- are considering the competitive advantages of a more proactive approach. There is heightened interest in supporting business sustainability, resiliency and agility. Companies are also exploring how AI technologies and sophisticated GRC platforms can improve risk management.

Financial vs. nonfinancial industries. In discussions of risk management, many experts note that managing risk is a formal function at companies that are heavily regulated and have a risk-based business model.

Banks and insurance companies, for example, have long had large risk departments typically headed by a chief risk officer (CRO), a title still relatively uncommon outside of the financial industry. Moreover, the risks that financial services companies face tend to be rooted in numbers and therefore can be quantified and effectively analyzed using known technology and mature methods. Risk scenarios in finance companies can be modeled with some precision.

For other industries, risk tends to be more qualitative and therefore harder to manage, increasing the need for a deliberate, thorough and consistent approach to risk management, said Gartner analyst Matt Shinkman, who leads the consulting firm's enterprise risk management and audit practices. "Enterprise risk management programs aim to help these companies be as smart as they can be about managing risk," he added.

Traditional risk management often gets a bad rap these days compared to enterprise risk management. Both approaches aim to mitigate risks that could harm organizations. Both buy insurance to protect against a range of risks -- from losses due to fire and theft to cyber liability. Both adhere to guidance provided by the major standards bodies. But traditional risk management, experts argue, lacks the mindset and mechanisms required to understand risk as an integral part of enterprise strategy and performance.

"Siloed" vs. holistic is one of the big distinctions between the two approaches, according to Shinkman. In traditional risk management programs, for example, risk has typically been the job of the business leaders in charge of the units where the risk resides. For example, the CIO or CTO is responsible for IT risk, the CFO is responsible for financial risk, the COO for operational risk and so on. Departments and business units might have sophisticated systems in place to manage their various types of risks, Shinkman explained, but the company can still run into trouble by failing to see the relationships among risks or their cumulative impact on operations. Traditional risk management also tends to be reactive rather than proactive.

"The pandemic is a great example of a risk issue that is very easy to ignore if you don't take a holistic, long-term strategic view of the kinds of risks that could hurt you as a company," Shinkman said. "A lot of companies will look back and say, 'You know, we should have known about this, or at least thought about the financial implications of something like this before it happened.'"

In enterprise risk management, managing risk is a collaborative, cross-functional and big-picture effort. An ERM team, which could be as small as five people, works with the business unit leaders and staff to debrief them, help them use the right tools to think through the risks, collate that information and present it to the organization's executive leadership and board. Having credibility with executives across the enterprise is a must for risk leaders of this ilk, Shinkman said.

These types of experts increasingly come from a consulting background or have a "consulting mindset," he said, and they possess a deep understanding of the mechanics of business. Unlike in traditional risk management, where the head of risk typically reports to the CFO, the heads of enterprise risk management teams -- whether they hold the chief risk officer title or some other title -- commonly report to the CEO, an acknowledgement that risk is part and parcel of business strategy. e24fc04721