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5 things a good risk assessment should include

Effective risk management is essential in the fast-paced corporate environment of today. As regulatory standards are constantly tightened, it becomes necessary to mitigate risk as much as possible.

Risk assessments provide a holistic view of existing risks within an organization, ensuring they are properly identified in order to capitalize on opportunities. It can be quite challenging to completely understand the risks that can affect an organization’s ability to survive, let alone thrive in an ever-changing marketplace.

A risk assessment takes the guesswork out of the equation, allowing companies to focus on the factors most important to normal business operations. Here are five things every good risk assessment should include.

1. Identify possible hazards and risks with penetration testing

Every risk assessment should begin by identifying the possible hazards and risks faced by an organization. A hazard is something that has the potential to cause harm and risk is measured by how likely that harm is to occur. According to the American Society of Safety Professionals, “Working from the information gathered during risk identification, stakeholders can then begin to analyze the risk levels of certain hazards and prioritize actions based on existing controls.”

You can identify hazards by observing what goes on in the workplace and talking to employees. One example would be to ask them about computer security. Have they received any emails deemed suspicious?

This hazard would be considered a risk if employees unknowingly received an email containing a virus and forwarded it to others, thus possibly contaminating the entire network.

Penetration testing finds ways to break into your company network either physically or digitally, then determines how the penetration occurred. Here, organizations are able to actually see just how easy it can be to bypass security protocols or penetrate the network in a new way.

2. Decide where and how the damage might occur

Once you identify the hazards and risks, you need to determine where and how the damage might occur. For instance, what would happen if your organization was plagued by a phishing attack? How would your employees respond? What types of data would be compromised or lost? A good risk assessment answers these questions.

Related: Why Your Business Needs a Security Risk Assessment

3. Put control measures in place

Control measures are an essential part of a good risk assessment. Once you decide the parts of an organization that will be affected by the risks and who they might harm, it’s time to put some control measures in place. You can do this by controlling the risks to avoid harm. One example would be providing mandatory company-wide training to show employees what these virus-laden and phishing emails may look like so they’ll know how to head them off.

4. Identify all possible outcomes

A good risk assessment identifies all possible errors and outcomes. As noted on the Lucidchart Blog, “With a risk assessment process, companies can identify and prepare for potential risks in order to avoid catastrophic consequences down the road and keep their personnel safe.”

One primary goal of a risk assessment is to identify critical tasks carried out by the company. These can include those completed frequently as well as those that take place periodically.

Related: Cybersecurity is more important than ever, and here’s why

In order to figure out how a problem could be avoided, you must first understand all the possible outcomes that could occur should something go wrong. Only then can you develop a plan for avoiding or resolving them.

5. Address residual risks

A good risk assessment will address residual risks when still in the testing phase. There will be tasks that are considered critical that are placed high up in the ranks because of the severity of potential harm.

Should you observe an error when conducting a validation study, you’ll need to decide if it could be serious in terms of safety. If you determine that an error found in a critical task is acceptable, the residual risk may be acceptable. If not, you’ll have an opportunity to correct it.

Be diligent with your risk assessments

Your validation studies will be successful if you are diligent about conducting multiple risk assessments. Invest time, effort, and care into them and minimize the risk to your company and employees.

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