Who generally holds responsibility for risk management within an organization?

The responsibility for risk management within an organization is typically shared among various stakeholders, not confined to a single individual or a specific group. Operational colleagues and risk specialists play crucial roles in identifying, assessing, and managing risks relevant to their areas of expertise. This collaborative approach ensures that risk management is integrated into daily operations, allowing for a comprehensive understanding of risks as they arise in different functions of the business.

Risk specialists provide the technical knowledge and frameworks necessary for effective risk management, while operational colleagues bring insights from their day-to-day experiences that are vital for recognizing potential risks. By involving a broader range of employees in the risk management process, organizations can foster a culture of risk awareness and proactive management, making it more effective than if it were solely the responsibility of a single risk manager or the board of directors.

While leadership, such as the board of directors, does play an essential role in setting the organization's overall risk appetite and ensuring that effective systems are in place, the practical aspects of risk management depend on collaboration across various levels and departments within the organization. Thus, the involvement of both operational colleagues and risk specialists is paramount for a robust risk management framework.