The Third Elements Of Risk Organization And Governance

Third element is Risk Organization and Governance. This element covers how an organization structures its risk along with allocating final responsibility among certain positions in the organization in order to empower the employees with the proper understanding and significance to the risks certain departments in the organization are exposed to. Certain key employees with authority take these elements of risk management into account in order to retain, avoid or transfer possible risks. Having a whole organization follow a risk management mindset is crucial, both horizontally and vertically in an organization.
The fourth element of risk is the Risk Culture in an organization. This encompasses the structure / framework an institution deploys to strengthen mindsets and behavior of employees, which in other words is employee empowerment. An example of this would be an institution that …show more content…
This element mainly contains traditional risks associated with an organization and its operations. However, with the ever growing continuum of information technology, majority of institutions have found that cyber risks are where they’ve found to have imperfect transparency and understanding of risks. On top of cyber risks, regulation and the constant changing of regulatory requirements makes it difficult for organizations to have accurate transparency or insight. Among these factors have one common element; that is these two types of risks are new. New risks introduced into an organizations risk management have to have data compiled in order to create a certain security measure that protects the business from these types of loss exposures.
The five elements serve as a type of framework for businesses such as financial institutions to base their organizational operations on, regardless of the size of the organization, this type of risk management can be integrated into any business no matter or big or how small it may