What is a Risk Management Matrix
A risk matrix is a method by which organizations can define and categorize various potential risks facing the organization, often by the frequency and severity of a given event. For information security teams, risk matrices are especially significant as they contextualize cyber risks alongside the risks that business leaders are used to seeing and addressing (business process, operational, etc.).
Risk management matrices help organizations prioritize which risks are most relevant and give cybersecurity leaders a path to mitigate those risks in order of priority.
How to Create a Risk Matrix for Cybersecurity Programs
Creating a risk management matrix begins with a risk assessment. To develop a risk control matrix, the organization must identify the risks they face; the probability that a risk will be realized in the form of a cyber event, and the severity of potential impact should an incident occur.
Once the risk assessment is complete, and the organization understands the risks that the organization is facing, the next step is categorizing them based on their frequency and impact. We’ll note here that a risk appetite statement can streamline the categorization process. Financial institutions and insurance organizations mainly use risk appetite statements to document the level of risk that the organization is willing to accept to achieve their business objectives.
During the categorization process, your organization will have to decide the extent to which you want to categorize each risk based on frequency and impact. For the most part, cybersecurity leaders will use the quantification method employed by the framework guiding the risk assessment (NIST, FAIR, etc.). As with all aspects of the risk management process, an essential thing to bear in mind is ensuring that the methodology employed delivers irks analytics in a way that is of most value to the organization.
Whether using a risk appetite statement or not, understanding what a “frequent” risk is to your organization (events per annum) and the level of impact (what does a “high impact” cyber incident look like for your organization?) is critical for developing your matrix for cyber security. With each risk categorized by frequency of the risk occurring and impact, we can move into visualization.
Visualizing your risk matrix is the essential step when presenting to executive management. This visual represents months of work for your team, and it is also one of the most explicit ways to present cyber risks to a non-technical audience. Adding color-coding to the matrix can also help convey your message and increase understanding of the organization’s most critical risks.
Why Cybersecurity Leaders Need a Risk Assessment Matrix
As more executive management teams are demanding greater visibility into cybersecurity operations, the ability to aggregate risks and present the risk impact and the controls to mitigate is critical. Especially for cybersecurity leaders who, to this point, have operated siloed from teams managing other types of risk facing the organization, presenting cyber risk analyses and data in a way that aligns with existing reporting methods.
From an internal perspective, risk matrices enable greater transparency across the information security organization and help contextualize risk management efforts around business objectives. Where many teams can get lost in the minutiae of managing risks, cyber risk matrices add a greater understanding of how their efforts contribute to business growth. Furthermore, risk matrices enable more informed project management, empowering project managers to understand where to begin when assessing risks and determining the best course of action to mitigate a project’s risks. A risk matrix helps your information security organization understand how their efforts align with the business and bring their thought process to how risk control and mitigation affect the business.
How to Present to Executive Leadership from Risk Matrices
As we discussed earlier, risk matrices are employed across various business units that manage and analyze risk. By presenting cyber risk in a risk matrix format, CISOs are taking a proactive step towards being understood in the Boardroom. When reporting on risks facing the organization, starting with a risk matrix to initially present risk will help business leaders understand what risks are top of mind for the CISO and cybersecurity organization, while also presenting lower-tier risks for context.
Alongside gap analyses like those seen in CyberStrong’s Governance Dashboards, a risk matrix facilitates a discussion at the executive level around high-risk activities and how the current business strategy informs the overall strategy for the enterprise. By increasing transparency at both the tactical and management levels, through robust quantitative risk analysis that is easily explained and presented in a familiar format (a risk matrix), executive management will build trust and credibility between the Board, CEO, and CISO.
Risk matrices are the culmination of months of work by risk management teams and play a critical function in helping executive management understand the most significant cyber risks facing the organization. Using an integrated risk management software like CyberStrong streamlines and simplifies the entire risk management lifecycle and helps infosec leaders present their program to enable cybersecurity to be managed as a business function. If you have any questions about building your risk management matrix, transparent risk reporting, or would like to see a demo don’t hesitate to reach out at 1-800-NIST CSF or click here or request a demo of the CyberStrong platform.