Risk Descriptions that sit alongside each Risk Category in your register, explain how a risk category is being impacted in your business.
Your Risk Register will list Risk Categories, with some common inclusions being Financial risk, People risk, ESG risk, Cyber and AI risk and Supplier & supply chain risk, just to name a few.
The Risk Description that accompanies each of these risk categories, describes how that risk is impacting your business. These risk descriptions change and evolve, as our business & operating environments change as well as how our economic, regulatory and political landscape changes.
Let’s look at some examples of how Risk Descriptions can change and evolve:
- AI risk previously focussed on the risk of our teams actually using AI to source and provide information. Now that many organisations have developed AI policies & have embraced the use of AI at work, the risk has shifted to be about the lack of due diligence applied to AI generated sources and accuracy.
- Insurance risk used to be focussed on how internal and external events could impact the organisation’s insurance premiums. Now, largely due to changes in insurance markets, the risk can often be about actually securing insurance coverage for certain risks.
- People risk was often centred around the inability to source suitably qualified resources and key person dependency, whereas now this risk is often described in terms of turnover, burnout, and fatigue related to work pressures and demands.
- WHS risk is often described in terms of risk associated with physical injury however due to legislative changes, this risk is often now described in relation to psychological safety & psychosocial hazards presenting in workplaces.
So as you can see, as environments change and evolve, so does the way the risk is impacting our business.
Risk Descriptions matter, because if you can describe HOW each risk category is being impacted, you can develop and implement effective risk controls for it – you need to describe a risk to inform how you manage it.
You should review and refine your Risk Descriptions regularly, ensuring they are informative and contemporary. This in turn, enables you to provide relevant information to your Leadership Teams, the Board, and any sub-committees such as your Audit & Risk Committee. And of course, this should always be followed up by reviewing your risk ratings and risk controls.
3 Key Actions you should take right now
- Review the risk categories in your risk register to ensure you have captured your business risks including emerging risks
- Review and refine your risk descriptions to make sure they accurately describe how that risk is being impacted in your business
- Update your risk register in consultation with your senior leaders, executives and Board
Final Thoughts
It is important to regularly review your risk register and ensure the risk description for each risk category accurately reflects how that risk is being impacted in your business. Remember – if you can describe it accurately, you can develop and implement risk controls to manage it effectively.
Want a bit more information?
Read our past blogs on risk management. Specifically:
- May 2025 – Reviewing your Risk Register
- July 2026 – Top Emerging Risks for Australian Businesses
Have a great week,
Bron
