1. Purpose
The purpose of this Security Risk Management Policy is to establish a structured and consistent approach for identifying, assessing, evaluating, treating, monitoring, and reporting information security risks that may affect the organization’s operations, information assets, technology systems, customers, employees, and business objectives.
Effective risk management enables the organization to make informed decisions regarding the protection of information assets, allocate resources appropriately, reduce the likelihood and impact of security incidents, and support compliance with legal, regulatory, contractual, and business requirements.
This policy establishes the framework for managing information security risks throughout the organization.
2. Scope
This policy applies to:
- All employees
- Contractors
- Consultants
- Temporary personnel
- Interns
- Third-party personnel with access to organizational systems or information
This policy applies to:
- Information assets
- Information systems
- Networks
- Applications
- Cloud environments
- End-user devices
- Physical facilities
- Business processes
- Third-party relationships
- Data repositories
- Technology infrastructure
The policy applies to all business units, departments, and organizational functions.
3. Policy Statement
The organization shall maintain a formal Security Risk Management Program designed to identify, assess, evaluate, treat, monitor, and communicate information security risks.
Security risks shall be managed using a risk-based approach that aligns with organizational objectives, risk tolerance, regulatory requirements, and industry best practices.
Security-related decisions shall consider both the likelihood and potential impact of identified risks.
4. Objectives
The objectives of this policy are to:
- Identify information security risks.
- Evaluate risks consistently across the organization.
- Reduce the likelihood and impact of security incidents.
- Support informed decision-making.
- Align security investments with organizational risk.
- Protect information assets and business operations.
- Support regulatory and contractual compliance.
- Promote continuous improvement of security controls.
5. Definitions
Risk
The potential for a threat to exploit a vulnerability and adversely affect organizational assets, operations, reputation, finances, or objectives.
Threat
Any circumstance or event that may negatively impact organizational information assets or systems.
Vulnerability
A weakness that can be exploited by a threat.
Risk Assessment
The process of identifying, analyzing, and evaluating risks.
Risk Treatment
Actions taken to reduce, transfer, avoid, or accept risk.
Risk Owner
An individual responsible for managing a specific risk.
Residual Risk
The level of risk that remains after controls have been implemented.
Risk Register
A documented inventory of identified risks and associated management activities.
6. Risk Management Principles
The organization’s Security Risk Management Program shall be based on the following principles:
- Risk-based decision-making
- Business alignment
- Continuous improvement
- Accountability
- Consistency
- Proportionality
- Transparency
- Compliance with applicable requirements
Security controls shall be implemented based on risk and business needs rather than solely on technology considerations.
7. Roles and Responsibilities
Executive Management
Responsible for:
- Establishing risk tolerance.
- Approving risk management strategies.
- Reviewing significant security risks.
- Providing resources for risk management activities.
- Supporting risk treatment initiatives.
Information Security Team
Responsible for:
- Maintaining the Security Risk Management Program.
- Conducting risk assessments.
- Facilitating risk reviews.
- Maintaining the risk register.
- Reporting risk status.
- Recommending risk treatment strategies.
Managers and Department Heads
Responsible for:
- Identifying risks within their areas of responsibility.
- Participating in risk assessments.
- Supporting risk mitigation activities.
- Monitoring assigned risks.
Risk Owners
Responsible for:
- Managing assigned risks.
- Implementing risk treatment plans.
- Monitoring risk status.
- Reporting changes in risk conditions.
Employees and Authorized Users
Responsible for:
- Reporting identified risks and vulnerabilities.
- Following security policies and procedures.
- Supporting risk management activities.
8. Risk Management Framework
The organization shall manage security risks through the following activities:
- Risk identification
- Risk assessment
- Risk analysis
- Risk evaluation
- Risk treatment
- Risk monitoring
- Risk reporting
- Risk review
These activities shall be integrated into business and technology processes.
9. Risk Identification
Security risks shall be identified on an ongoing basis.
Sources of risk identification may include:
- Risk assessments
- Vulnerability assessments
- Penetration testing
- Security incidents
- Audit findings
- Compliance reviews
- Threat intelligence
- Change management activities
- Vendor assessments
- Employee reporting
Risk identification activities shall consider both internal and external threats.
10. Risk Assessment
Risk assessments shall be conducted periodically and when significant changes occur.
Assessments may evaluate:
- Information assets
- Systems
- Applications
- Networks
- Cloud services
- Business processes
- Vendors and service providers
Risk assessments shall consider:
- Threats
- Vulnerabilities
- Existing controls
- Likelihood
- Potential impact
Assessment methodologies shall be documented and applied consistently.
11. Risk Analysis
Identified risks shall be analyzed to determine their significance.
Risk analysis shall consider factors such as:
- Confidentiality impact
- Integrity impact
- Availability impact
- Financial impact
- Operational impact
- Legal impact
- Regulatory impact
- Reputational impact
Analysis methods may be qualitative, quantitative, or hybrid.
12. Risk Evaluation
Risks shall be evaluated against established risk criteria and organizational risk tolerance.
Risks may be categorized as:
- Critical
- High
- Moderate
- Low
Risk ratings shall be documented and reviewed periodically.
13. Risk Register
The organization shall maintain a risk register containing:
- Risk descriptions
- Risk owners
- Risk ratings
- Existing controls
- Treatment plans
- Target completion dates
- Review dates
- Residual risk assessments
The risk register shall be updated regularly.
14. Risk Treatment Strategies
Risks shall be managed using one or more of the following treatment options:
Risk Mitigation
Implement controls to reduce likelihood or impact.
Examples include:
- Security technologies
- Administrative controls
- Process improvements
- Training programs
Risk Transfer
Transfer risk to another party.
Examples include:
- Insurance
- Contractual agreements
- Managed services
Risk Avoidance
Eliminate activities that create unacceptable risk.
Risk Acceptance
Accept the risk when it falls within approved risk tolerance levels.
Accepted risks shall be formally documented and approved.
15. Risk Acceptance
Risk acceptance decisions shall:
- Be documented
- Include business justification
- Identify residual risk
- Be approved by appropriate management
- Be reviewed periodically
Risk acceptance does not eliminate responsibility for monitoring the risk.
16. Security Control Selection
Security controls shall be selected based on:
- Risk assessment results
- Regulatory requirements
- Contractual obligations
- Industry standards
- Business objectives
Control selection shall consider effectiveness, cost, complexity, and operational impact.
17. Third-Party Risk Management
Risks associated with third parties shall be assessed and managed.
Third-party risk evaluations may include:
- Security questionnaires
- Compliance reviews
- Contract assessments
- Audit reports
- Security certifications
Third-party risks shall be documented and monitored.
18. Change Management and Risk
Security risks shall be evaluated as part of significant organizational and technology changes.
Examples include:
- New systems
- New applications
- Infrastructure changes
- Cloud migrations
- Business acquisitions
- Vendor changes
Risk assessments shall be conducted before implementation where practical.
19. Continuous Risk Monitoring
The organization shall continuously monitor identified risks.
Monitoring activities may include:
- Vulnerability scanning
- Threat intelligence review
- Security monitoring
- Compliance reviews
- Audit activities
- Incident analysis
Changes in risk conditions shall be evaluated promptly.
20. Risk Reporting
Security risk information shall be communicated to appropriate stakeholders.
Reports may include:
- Risk assessment results
- High-risk findings
- Treatment plan status
- Compliance-related risks
- Emerging threats
- Residual risk summaries
Reporting frequency shall be based on risk significance and business requirements.
21. Security Metrics
The organization shall establish metrics to measure the effectiveness of risk management activities.
Metrics may include:
- Number of identified risks
- Risk treatment completion rates
- Vulnerability remediation performance
- Incident trends
- Residual risk levels
- Assessment completion rates
Metrics shall support management decision-making.
22. Compliance and Regulatory Considerations
Risk management activities shall support compliance with applicable:
- Laws
- Regulations
- Industry standards
- Customer requirements
- Contractual obligations
Compliance requirements shall be incorporated into risk assessments where appropriate.
23. Exceptions
Exceptions to this policy must:
- Be documented
- Include business justification
- Include risk analysis
- Be approved by management
- Be reviewed periodically
Compensating controls shall be considered where appropriate.
24. Compliance and Auditing
Compliance with this policy shall be verified through:
- Internal audits
- External audits
- Risk management reviews
- Security assessments
- Compliance assessments
Findings shall be documented and tracked through corrective action processes.
25. Enforcement
Violations of this policy may result in:
- Removal of system access
- Disciplinary action
- Contract termination
- Legal action where applicable
26. Review and Maintenance
This policy shall be reviewed:
- At least annually
- Following significant business changes
- Following major security incidents
- Following regulatory changes
- Following changes to the risk management framework
Updates shall be approved by executive management.
27. Related Policies
- Information Security Policy
- Security Governance Policy
- Security Control Framework Policy
- Vulnerability Management Policy
- Vendor Management Policy
- Incident Response Policy
- Business Continuity Policy
- Change Management Policy
- Compliance Policy
28. Policy Approval
Policy Owner: Chief Information Security Officer (CISO) or Information Security Manager
Approved By: Executive Management
Effective Date: __________________
Review Date: __________________
Version: 1.0