Best practice in qualitative risk
While it might be easier to get started with qualitative risk analysis as it partly relies on intuition and experience, it’s about more than simply creating likelihood assessments based on past events and environmental factors. It’s about how you establish the process of interpreting, categorizing, sharing and even discussing risk.
For instance, departments must establish clear and agreed-upon technology when talking about risk and agree on formalities and processes when relaying risk-based information. Frequent engagement by leadership will also prove advantageous, ensuring that it stays a core part of the company’s culture and the channels of communication between departments remain open.
It’s also worth bearing in mind that what one department sees as low risk another department may see as high risk, so aggregate reporting will need to take this into account when developing a hierarchy of risks to an organization as a whole. Transparency is another area that businesses will have to work hard on if they foster an open and valuable culture around risk reporting, without compromising on confidentiality or security.
All of these things and more must be considered if a business is to leverage qualitative risk analysis to its advantage and use it as part of its overall risk management solution.
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