Overview

Risk classes are categories used by StartRisk to group similar types of risks. This classification approach enables the following benefits:

• Assigning Accountability: Each class of risks should be assigned to a senior leader, who is responsible for oversight of the risks within that class. This approach ensures focused oversight of that class of risks across the business preventing risks emerging in silos.
• Holistic Risk Assessment: Grouping risks into classes allows for a comprehensive assessment of the collective impact of the risks on the achievement of strategic objectives. It enables business’ to see the bigger picture and understand the cumulative effect of related risks.
• Strategic-Level Oversight: Risk classes facilitate the creation of strategic-level reports suitable for executive and board-level consumption. These reports are exception based and provide a clear and concise overview of risks by category, aiding in strategic decision-making and governance.

StartRisk’s AI assists users in establishing business specific risk classes by considering their business scope and context (e.g. industry, revenue level, business size, etc.) in line with ISO 31000. Users can then choose from the recommended risk classes or define their own.

Key Concepts

Risk Classes are categories used to group similar types of risks. Risk classes are typically aligned to key strategic objectives for the business.

Example

Consider a technology startup with the strategic objective of becoming a market leader in innovative software solutions. The following risk classes might have a significant impact this objective if not well managed:

• Operational Risks: Risks such as system failures or process inefficiencies could hinder product development and deployment, impacting the ability to innovate effectively.
• Financial Risks: Poor financial planning could limit the company's runway and its ability to invest in research and development, affecting its innovation potential.
• Innovation Risks: Failing to anticipate market trends or misjudging customer preferences could lead to strategic missteps, derailing the objective of leading in innovation.
• Reputational Risks: Negative public perception, whether due to product issues or business practices, could diminish customer trust and loyalty, impacting the company's growth.