Risk Management Step 4: Monitor Risks

Step four in the risk management process is to monitor what goes on in your business. Since originally implementing your risk management plan changes have likely occurred and subsequently your risk management methods might need tweaking. During the monitoring phase, staff should be consulted to determine the success of risk management strategies. Also, during this phase records should be updated and reviewed for compliance and success in controlling risk.

This is a good point in time to examine if any of the first three steps of the risk management process need to be modified. In step one of the risk management process, risks were identified. Consider if all the key stakeholders were originally identified in this process. If any key stakeholders were missed, how do they impact your risk management plans? In addition to changes in key stakeholders, since implementing your risk management plan, have there been any changes in law, or lawsuits affecting you or your industry? This, too, may change how you control your risk. Yet another consideration is if your organization has been exposed to any incidents either at your facility or off-premises. How do these incidents affect your business? Are there any new risks that can be identified?

The second step in the risk management process is to assess your risks by classifying the likelihood and severity of each risk. In reviewing your original plan, you should consider if risks should be reclassified. Also, if new risks have been identified since implementing your risk management procedures these, too, must now be rated for likelihood and severity.

Step three in the risk management process is to control risks. This is a good opportunity to review your decisions to retain, transfer, reduce, or avoid each risk. Again, if new risks were identified or if old risks were reclassified, methods of control must again be reconsidered.

Finally, once steps one through three have been reviewed once more, continue to monitor and adjust your risk management plan. Ideally this reflection process should be conducted annually, or more frequently if needed, to stay on top of managing your risks.