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Operational risk management (ORM) is defined as a continual recurring process that includes risk assessment, risk decision making, and the implementation of risk controls, resulting in the acceptance, mitigation, or avoidance of risk.
The operational risk management framework should include identification, measurement, monitoring, reporting, control and mitigation frameworks for operational risk. There are a number of methodologies to choose from when modeling operational risk, each with its advantages and target applications.
This approach does not completely eliminate process risk, yet it is a tool for the evaluation of the overall risk exposure so that the company may be able track and manage the risk linked to the overall business processes. [5] Another possible approach would be to implement a collaborative approach within the operational processes of a business.
As a professional role, a risk manager [8] will "oversee the organization's comprehensive insurance and risk management program, assessing and identifying risks that could impede the reputation, safety, security, or financial success of the organization", and then develop plans to minimize and / or mitigate any negative (financial) outcomes.
There are various types of business risks: strategic, compliance, financial and operational. [ 2 ] Risk assurance aims to mitigate any of these areas. As such, companies can pre-analyse the industry to scout for potential risks or if a risk has already occurred, managers can analyse the problem in an attempt to mitigate the effects.
Transferral - Shifting risks to other areas or to outside entities; Mitigation - Reducing the impact of information assets should an attacker successfully exploit a vulnerability; Acceptance - Understanding the consequences of choosing to leave a risk uncontrolled and then properly acknowledging the risk that remains without an attempt at control