The Velocity of Risk Framework™
Effective oversight functioning of “GRC” (Governance, Risk, and Compliance) requires experience and guidance from having
“been in the chairs,” understanding and setting role definitions, and incorporating theory and practice to structure, strategy, and execution. Either an organization’s functions are synchronized…and properly prioritized…or not.
Governance and Risk Management have long held central prominence within an entity’s executive team strategy, and its board of directors, if not also necessary for a company’s inception, continuity/survival, and growth.
Three levels of foundational focus comprise an effective framework for governance.
These represent an entity’s:
- Long-term economic reason for being (the “why” or “vision”)
- Principled as well as Principal drivers
- Implementation and execution approaches
Risk Management is an entity’s intrinsic and extrinsic approach to conducting critical governance guidance and oversight. Effective risk management requires: deep industryand enterprise “landscape,” if not societal, knowledge; a strategic structure driving orcomplemented by operational awareness and dexterity; effective time frame-based anticipatory and outcome-based insights – a.k.a. a valid understanding of “cause-effect”relationships; data and trend-monitoring skills; all causing “right,” if not
speedy action/reaction resilience.
The prototypical (but seriously incomplete) views of risk have classically prioritized two
primary and standalone ‘variables’:
1. The probability that a ‘bad thing’ will happen, and,
2. The size or impact of that event.
This limited perspective ignores physics and reality…the speed with which things happen, or better described as “The Velocity of Risk” (TM) framework. Furthermore, and just as importantly, the two factors ignore the upside, or opportunities. Provided
within the Case Studies are researched and published articles (presentations) which provide historical perspective as well as address the shortcomings of the two-factor approach.
Contact us for Risk Management and “The Velocity of Risk” ™ framework prioritization.
Governance and Risk Management have long held central prominence within an entity’s executive team strategy, and its board of directors, if not also necessary for a company’s inception, continuity/survival, and growth.
Three levels of foundational focus comprise an effective framework for governance.
These represent an entity’s:
- Long-term economic reason for being (the “why” or “vision”)
- Principled as well as Principal drivers
- Implementation and execution approaches
Risk Management is an entity’s intrinsic and extrinsic approach to conducting critical governance guidance and oversight. Effective risk management requires: deep industryand enterprise “landscape,” if not societal, knowledge; a strategic structure driving orcomplemented by operational awareness and dexterity; effective time frame-based anticipatory and outcome-based insights – a.k.a. a valid understanding of “cause-effect”relationships; data and trend-monitoring skills; all causing “right,” if not
speedy action/reaction resilience.
The prototypical (but seriously incomplete) views of risk have classically prioritized two
primary and standalone ‘variables’:
1. The probability that a ‘bad thing’ will happen, and,
2. The size or impact of that event.
This limited perspective ignores physics and reality…the speed with which things happen, or better described as “The Velocity of Risk” (TM) framework. Furthermore, and just as importantly, the two factors ignore the upside, or opportunities. Provided
within the Case Studies are researched and published articles (presentations) which provide historical perspective as well as address the shortcomings of the two-factor approach.
Contact us for Risk Management and “The Velocity of Risk” ™ framework prioritization.
Drill-Down
Utilizing The Velocity of Risk Framework ™
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Risk-Based Auditing
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Other Case Studies
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Utilizing The Velocity of Risk Framework™ or risk-prioritization
within public company filings:
Serving as CEO of a public company in
South Carolina, executive oversight directly influenced the prioritization and
“embracing” of the entity’s 10K filing (“risk factors”), all driven by the
concept: The Velocity of Risk ™ framework. Administered by the director
of internal audit (CIA and CRMA certified), the management team function-
heads were required to complete a matrix to rank risk, incorporating the
THREE variables:
1.) Probability.
2.) Size of impact; and
3.) VELOCITY.
Quantified weighted average rankings impacted the risk factors developed
for the company’s 10K filing, as well as influencing risk descriptions,
awareness, monitoring, and remediation tactics. Furthermore, to offset the
entity’s prior year’s qualified opinion from its public accounting firm, The
Velocity of Risk ™ framework also applied criticality (and “the need for
speed”) to ensure all factors causing the adverse opinion were resolved for
successful auditor, audit committee, and SEC filing requirements.
Risk-Based Auditing at a Global Telecommunications Company:
As part of a public company (global telecommunications) internal audit
approach, and to display the relevant historical advocacy of both risk-based
auditing and the use of The Velocity of Risk ™ framework, the entire audit
plan was changed to incorporate impact, probability, and velocity. This
approach was taken by the incumbent Chief Audit Executive (in the 1980s)
to ensure audit priorities were directly linked to perceived risks, monitoring
capabilities, timely reporting and…speedy resolution.