About the 52 Risks® Framework
52 Risks® is a unique, innovative framework designed to assist organizations identify, assess and manage their business risks. The framework comprises 17 Strategic Risks, 16 Financial Risks and 19 Operational Risks. All potential business risks will map to one of these risk categories.
52 Risks® provides a high-level, end-to-end framework that enables organizations to understand and determine their risk profile. In addition, organizations can, on an ongoing basis, measure and manage changes in its risk profile. The risks can be internal or external, short, medium or long term.
52 Risks® can assist all organizations – no matter how large or small – to compile the definitive list of strategic, financial and operational risks that can impact them.
The framework enables both a top-down and bottom-up analysis of key strategic, financial and operational risks. By systematically working through each risk category, a core list of key business risks can be identified for further investigation. Very low risk categories can be discarded early in the top down approach, leaving a relevant list of risk categories to be explored and assessed further.
Information on existing, known risks from management reports, financial reports, audit reports and any previous risk assessments undertaken can identify key business risks and build a risk profile of the organization. This bottom up analysis can leverage off the understanding within the organization about key business risks.
How to Use 52 Risks ®
52 Risks® framework brings together in one framework the key strategic, financial and operational risk categories that face all businesses. It also proposes a common language and terminology for business risks in a consistent manner.
There are many different ways in which businesses can use the 52 Risks® framework. This can be in workshops, strategic planning sessions or management meetings. Here are some of the examples in which the framework can be used:
- Use 52 Risks® to complete a full enterprise wide assessment of all business risks. This can be undertaken as a top down assessment, based on the existing knowledge of the organization by its owners and managers, supplemented by any existing, bottom up management reporting;
- Use 52 Risks® as a tool to undertake a review of strategic & emerging risks for strategic and business planning. This can be a high level review or a more detailed review;
- Identify specific business risks in the 52 Risks® framework for further interrogation – or more substantial deep dives – on specific clusters of risks or individual risk categories;
- Undertake a risk review, using the 52 Risks® framework, of a specific investment, acquisition or capital expenditure to assess the potential risks and impact on the overall risk profile of the organization from the particular initiative;
- Use 52 Risks® as a tool to assist with forecasting future scenarios and assessing downside risks for the organization at an enterprise level;
- Use 52 Risks® an educational tool for executives and business managers to better understand the risk profile of an organization and its business units;
- For external stakeholders, such as equity investors, debt investors, financiers and credit rating agencies, use 52 Risks® as a tool to assist gaining a greater understanding of the business risks of an organization.
Use of the framework will enable strategic planners and business decision makers to debate and agree on risk factors facing a business using a concise and easy to follow framework. This will result in more effective and well considered strategic planning and business decision making resulting in more resilient organisations.