In 2001 the collapse of Enron which was generally attributable to poor Corporate Governance and poor Risk Management Practices, hightened the need, for Corporates to put in place formalised Risk Risk Management Programmes as a Mechanism to help expresely Identify and Manage Risks Organisations are faced with in Today’s Business Environment.
One of the key Attributes of an Effective Risk Management Program is Risk Reporting, which is typically done through Risk Reports and Risk Dashboards. Effective Risk Reporting is done as an Integral part of an Organisation’s Strategic and Operational Reports and not as Stand-Alone Reports. The Question that come to mind is what is the value and purpose of Risk Management Dashboards?
Risk Management Dashboards are one and the same thing as any other Business Dashboards, which provide Business Intelligence Reporting Matrices that consolidate, aggregate and dispaly Critical Matrcs and Key Performance Indicators in a single Visual Screen to inform Decision Making and to examine Business Key Matrics at a Glance.
What Is A Dashboard and What Is it Used For?
A Dashboard is a Visual Display of data. While it can be used in all kinds of different ways, its primary intention is to provide information at a glance, such as KPIs. A dashboard usually sits on its own page and receives information from a linked database https://www.adjust.com. Risk Management Dashboards sometimes called Risk Matrix or Risk Decision Support Matrix should be seen as Dashboards that provides Decision Makers with Risk Management Information. It is generally agreed that there are 3 Types of Dashboards i.e. Operational Dashboards, Analytical Dashboards and Strategic Dashboards.
A Dashboard should be an easy to read, one page summary of the analysis of the information. It is an overview of your system at a glance. There are many advantages that result in the utilization of this tool. Some of the most important benefits are:
- All-in-one.- In the past users would spend large amount of time reviewing and analyzing different reports to end in a final conclusion. This tool allows to see, at a glance, an overall situation report of the desired information.
- Drill into detail.- But, having all-in-one does not means the absence of details. Dashboards are developed with the ability to get as deeper in information as required by simply selecting the desired variable or object.
- Intuitive data presentation.- There is no need for complicated and exhaustive training. Dashboards are design to be intuitive to any user. The graphic design allows an easy and smooth navigation throughout the information.
- Mobile device accessible.- Most dashboards software are programmed to suit any mobile device. The idea is to reach anywhere, to everyone, in a timely manner with the most accurate information.
The dashboard method of reviewing details and viewing the status of operations provides a significant opportunity to make your business more efficient and quick to respond to issues and opportunities. 5 Advantages of using dashboards, Business Intelligence Dashboards, Data analysis Dashboard, Big data dashboards (ontimebi.com)
What Are Attributes of a Risk Dashboard or Risk Matrix?
As per How To Use A Risk Prioritisation Matrix To Support Decision Making – RiskForesights.COM It should be noted that a Risk Matrix or Dashboard is not a Risk Assessment neither is it a RAG Rating Diagram even though these two variables do inform the Information Composition of a Risk Matrix. A Risk Matrix is not a One Size Fits All Matrix but should be customised for each and every Context (see example Queensland Government Enterprise Architecture ICT Risk Matrix Above) that it relates to. It should be seen as a Decision Support Tool that at a minimum assists Organisations make the following Decisions;
- Which Objectives will be Impacted by Risks Identified?
- Which Risks should we prioritise within a given time period in terms of Resources and Budget Allocation?
- Which Risks Should be monitored and reviewed at an Activity Level, Functional Level, Department Level, Corporate Level, Board Level and other Stakeholders such as Investors and Governments?
- Which Risks to embrace and not to embrace, i.e. which Risks are On – Strategy or Off – Strategy (e.g. Investments in Politically Volatile Countries, In Insurance which Risk to Retain, Core – Insure, Re-Insure or to decline, credit making decisions in Banking)
- Who will be lead the implementation of Risk Optimisation / Exploitation Action Plans?
At a Minimum A Risk Decision Support Matrix, should give Decision Makers a Bird’s View of the following Risk Information;
- An Organisation’s Top 6 – 10 Risks Profile informed by an in-depth Quantitative (e.g. Actuarial Analysis, Fanancial Analysis, Historical Trends Analysis, Big Data Analytics and/or an other fit for purpose Scientic Analysis) and Qualitative (e.g. Strategic Thinker or Decision Maker Hunch) Analysis of Risks. Top 6 – 10 Risks are a result of a Risk Aggregation and Risk Consolidation Process.
- Likehood or Probability of Occurance of a Risk Scenario within a defined time period (e.g. 1 Year, 5 Years or 10 Years) should be clearly defined.
- Objectives that the Risk Matrix relates to (e.g. Operational – ICT Risks, Strategic – Economic Risks) should be clearly defined.
- Impact the Risk Scenario should it materialise, will have on the Achievement of Objectives should be clearly articulated. (e.g. on Financial Peformance Objectives, Compliance Objectives, Safety Objectives, Service Delivery Objectives, ESG Objectives, Operational Peformance Objectives etc)
Risk Dashboard / Matrix Examples Since 2001
Please take a look at some of the Risk Dashboards / Matrices Examples, which I have come across, that Organisations have developed over time. These may be beneficial as a point of reference in your initiative to develop more informative Risk Dashboards / Matrices for your Stakeholders.