Risk Governance

Risk Governance forms the organizational framework that defines how risk management activities are conducted within an enterprise. It establishes clear authority, accountability, and responsibility for managing risks across all levels of the organization. Effective Risk Governance includes: 1. Executive sponsorship and board oversight that demonstrates commitment to risk management 2. A documented risk management policy describing the organization's risk attitude and appetite 3. Clear roles and responsibilities for risk management activities 4. Integration of risk processes with strategic and operational activities 5. Alignment with organizational objectives and culture The Risk Governance Framework typically consists of: - Risk Management Policy: Outlines the organization's approach to risk, including risk appetite and tolerance levels - Risk Management Plan: Details how risk processes will be implemented on projects - Escalation procedures for risks exceeding thresholds - Reporting structures and communication channels - Decision-making authorities for risk responses Risk Governance ensures that: - Risk management activities receive appropriate resources - Risk information flows efficiently through the organization - Risk decisions align with strategic objectives - Risk management practices remain consistent across projects - Risk performance is regularly monitored and evaluated For PMI Risk Management Professionals, understanding Risk Governance is essential as it provides the structure within which risk management operates. It connects project-level risk management to enterprise-level risk strategies. By establishing robust Risk Governance, organizations can foster a culture where risk awareness becomes part of everyday decision-making, leading to more informed choices and improved outcomes across the portfolio of projects and programs.

Risk Governance forms the organizational framework that defines how risk management activities are conducted within an enterprise. It establishes clear authority, accountability, and responsibility f…

Concepts covered: Risk Performance Measurement and Key Risk Indicators, Integration of Risk Management into Organizational Strategy, Risk Appetite and Risk Tolerance, Risk Governance Framework, Risk Communication and Reporting, Risk Escalation and Decision-Making Processes, Risk Culture, Risk Oversight and Monitoring, Roles and Responsibilities in Risk Governance