Every project has to deal with a certain amount of risk, no matter how carefully planned. To make risk management easier, a risk owner is brought in to manage and adhere to risk management plans, often focusing on each risk at a granular level. Learn more about risk owners and what they do in this definition.
What Is a Risk Owner?
A risk owner is an individual who is accountable for monitoring identified project or operational risks and developing and implementing strategies to manage them. Risk owners should have complete information on risks, including the sources, causes, and consequences. They also should be capable of preventing or mitigating risks effectively. In some cases, a risk owner is only responsible for one risk or one group of risks.
What Do Risk Owners Do?
These are the core responsibilities of a typical risk owner:
- Assess and monitor identified risks.
- Clearly articulate the causes and impact of risks in risk statements.
- Define risk tolerance measures.
- Develop risk mitigation strategies.
- Assist risk managers in the execution of risk mitigation plans.
- Regularly scan enterprise environments for emerging risks.
Risk Owner vs Risk Manager
Although the risk owner and the risk manager share many similarities across their roles, their exact professional responsibilities and scope of work are different. These are some of the most significant differences when comparing the risk owner vs the risk manager:
- The risk owner is responsible for a particular risk and its opportunities, whereas the risk manager is responsible for all risks related to a project.
- While the risk owner defines the risk and develops strategies to mitigate that particular risk, the risk manager provides an overview of project risks and facilitates communication and buy-in with management in order to mitigate those risks.
- The risk owner is required to meet the deadline and budget expectations defined by the risk mitigation plan, whereas the risk manager assesses risks and their opportunities to define project costs.
- The risk owner is responsible for submitting updated risk statuses to the risk manager. The risk manager is responsible for providing an overview of risk statuses to key stakeholders.
Important Characteristics of a Risk Owner
Most organizations choose a risk owner from an existing project team as they are already familiar with the risks associated with said project. When choosing a risk owner, the project manager or risk manager typically looks for these characteristics:
- The risk owner should be able to understand the risk, its causes, and its impacts.
- The risk owner should possess an eye for even minor risk changes.
- The risk owner should be capable of responding quickly when a risk becomes a problem.
- The risk owner should have prior experience in dealing with project risk.
- The risk owner should be able to meet the deadlines defined in the risk mitigation plan.
What Are the Benefits of Hiring a Risk Owner?
Hiring a risk owner helps organizations to stay organized and focused when dealing with risks across larger projects. Here are some important benefits of hiring a risk owner:
Comprehensive risk knowledge and visibility
Assigning risks to risk owners helps organizations get a clear overview of each risk and how to manage them effectively.
New project efficiencies
Hiring risk owners increases project efficiencies, which creates greater visibility and peace of mind for stakeholders.
Optimized resource management
Risk owners improve organizational productivity with time- and cost-saving efficiencies. With risk owners in place, the organization rarely needs to spend more on resources to deal with new risks as they arise.
Read next: Best Risk Management Software
