Approaches to Communicating Risk Insights

Effective risk management depends on clear, timely, and meaningful communication about risks and their responses. An organization’s ability to foster substantive discussions about enterprise-wide risks with senior executives and boards is critical for ensuring proactive oversight and informed decision-making.

The Value of Communicating Risk Insights

An effective ERM program creates opportunities for robust conversations around potential risk concerns. These discussions often focus on:

• The effectiveness of risk responses
• Emerging risk trends
• Metrics that track the impact and likelihood of risks

By communicating risk insights clearly and consistently, organizations empower decision-makers to prioritize risks, allocate resources effectively, and respond to emerging challenges with agility.

2024 Insights from Data on Risk Communication

Our findings from the 15th edition of The State of Risk Oversight Report, which we publish annually in collaboration with AICPA, reveal key trends in how organizations communicate risk information:

• Frequency of Reports: Nearly two-thirds of respondents, and about 90% of large organizations and public companies, provide formal reports of top risks to the board at least annually. Just under half do so quarterly.
• Number of Risks Reported: Most organizations report between 5 and 19 risks in formal reports to the board.
• Executive-Level Reports: Fewer than half (39%) of organizations prepare formal written reports about top risks for senior executives on an annual, quarterly, or monthly basis.
• Discussion Frequency: About one-third of organizations dedicate agenda time at management meetings to discuss key risks communicated to senior executives.

These findings highlight a need for more structured and frequent communication about risks at all levels of leadership.

Discussion Items for Management and Boards

Effective communication of risk insights to executive leadership and boards involves asking the right questions. Risk leaders can use these five prompts to foster meaningful discussions:

1. Are the risks being communicated aligned with the organization’s strategic objectives?
2. How are top risks evolving over time, and what metrics indicate these changes?
3. What are the most critical gaps in our risk responses?
4. How well are we monitoring key risk indicators (KRIs) to anticipate emerging risks?
5. What additional resources or tools are needed to improve our risk communication practices?

These questions can serve as starting points for more robust and productive conversations about risks.

Enhance Risk Management with a Free ERM Tool

To support your efforts, we’ve created a free ERM tool designed to help organizations improve the communication of risk insights. The Risk Profile Summary Tool streamlines the process of presenting risk information in a consistent, actionable format.

• Features:
  • A customizable template for summarizing risks
  • Guidelines for identifying and describing risk themes
  • Example profiles to help you get started

Click below to access the tool and learn how it can enhance your risk and management processes:

Conclusion

Communicating risk insights effectively is essential for a successful risk management program. By leveraging structured reports, asking insightful questions, and using tools like the Risk Profile Summary Tool, organizations can foster better alignment between leadership and risk management efforts.

Empower your team to navigate risks with confidence. Download the tool today and take the next step toward stronger, enterprise-wide risk oversight.