The process of a FWRA involves identifying and evaluating risks across all business functions, including operations, finance, human resources, legal, technology, and compliance. The aim is to develop a comprehensive understanding of the risks facing the business, their potential impact, and the likelihood of their occurrence. This process involves a wide range of activities, including data gathering, analysis, risk prioritisation, risk mitigation planning, and reporting.
The first step in a FWRA is to identify the risks. This can be done through a variety of methods, including reviewing internal documentation, conducting interviews with employees and stakeholders, and analysing external data sources. The goal is to create a comprehensive list of risks that the business faces, including operational, financial, reputational, legal, and regulatory risks.
Once the risks are identified, the next step is to evaluate them. This involves assessing the likelihood of the risk occurring and the potential impact it could have on the business. The evaluation process should consider both the financial and non-financial impact of the risk, including the potential impact on employees, customers, suppliers, and other stakeholders.
After identification and evaluation process has been conducted, the next step is to prioritise them. This involves ranking the risks based on their potential impact and likelihood of occurrence. The goal is to identify the risks that require immediate attention and those that can be addressed over time.
A risk mitigation plan should be developed, analysed and regularly updated. This involves developing strategies to address the risks identified in the previous steps. The strategies should be tailored to the specific risks and should take into account the resources available to the business. The goal is to develop a comprehensive risk management plan that addresses all of the identified risks and ensures that the business is adequately protected.
Finally, the results of the FWRA should be reported to senior management and the board of directors. The report should include a summary of the risks identified, the evaluation process, the prioritisation of the risks, and the risk mitigation strategies. The report should also include recommendations for ongoing risk management and monitoring.