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Every project is bound to encounter risks. But who is responsible for raising them, and who must take action to prevent them? Managing risks may seem daunting, especially in large projects and those with complex stakeholder networks. That’s why a dedicated team is necessary to manage the process and plan of action. In this article, we examine the roles and responsibilities of a strong risk management team.
Having someone dedicated to managing risks is important to prevent any from falling through the cracks and getting missed. This is a large undertaking for the project manager to do on top of their other responsibilities, and it can become very costly when risks become issues. Therefore, it is important to have someone with expertise in project risk management who can take care of this. For larger projects, a team of experts is necessary. Even outside of the immediate risk management team, there are many important stakeholders who participate in risk and opportunity management. Let’s take a look at the most important roles for your risk management team.
The risk manager provides an overview of the project’s risks (and opportunities) as well as their mitigation plan, facilitating management’s decision-making. They are the central figure for the project’s risk management activities.
The risk manager ensures compliance with the entire process established by the Risk & Opportunities Management Plan (ROMP). Their main activity is to identify and update risks and opportunities.
Additional activities in The Risk Manager’s role may include the following:
The risk owner is responsible for each individual risk. They work alongside the risk manager, as they hold all the technical information on risks and opportunities. They are often involved with risk identification and can, therefore, characterize it by defining the cause or causes of a risk and its consequences. Then, they make sure to have the updated information on each risk.
They also define the strategy, the treatment plan actions, and coordinate who will own these actions, or who will become the “actionee”. This is all, of course, with support from the risk manager.
Risk owners are responsible for meeting the deadlines defined by the mitigation or exploitation plans for each of their risks or opportunities. However, they might not necessarily be the risk actionee, who is in charge of doing the actions as defined in the Risk Management Plan.
The project manager works in collaboration with the risk manager. They set expectations and validate proposals made by the risk manager on the process and status for their project. They must have a global vision of their project’s risks and opportunities. Their role is also to position themselves on the critical risk response strategies proposed by risk owners, for example to accept a plan to reduce probability or impact.
For projects belonging to a larger program or portfolio, the project manager ensures the escalation of critical risks to the appropriate level. Depending on the project and its size, they might have full or partial responsibility to validate the costs that identified risks are likely to incur.
The risk center of competence enables the success of the organization’s risk management strategy by defining or improving their methods and procedures as well as the resources and skills needed. This team can act as a trainer and guide as well as provide capability resources for the project. This team is the source of documentation, guidance, audit, and advice for the company. Where there may be methodology concerns, the risk manager can refer to the risk center of competence for support.
Large companies will likely also have an enterprise risk management team who manages risk at the organizational level. Similar to the risk manager, this team provides an overview of the organization’s risks/opportunities and ensures compliance with their risk management process. This requires project risks to be flowed up to the portfolio level for the team to manage enterprise risk effectively and consistently.
The project team is commonly made up of a project controls manager and/or PMO, scheduler, cost controller, and the risk manager themselves. While maintaining the risk register, the risk manager will meet with the project team to discuss the possible impacts on the project’s schedule and budget.
Depending on the organization, the sponsor (with the support of the project manager) identifies any red flags in the project, starting with the creation of its charter, and shares them with the risk manager. With this information, the sponsor can define a global budget for risks and validate its use in case issues do arise.
In conclusion, risk management is essential for every organization, regardless of their size. From a single risk expert to a large team of risk managers, their role enables an organization to prevent issues from arising, minimizing the impact of those that are inevitable, and to take advantage of potential opportunities.
Thank you for the contributions of Marie BELGODERE, Jérémie CLAUSTRE, Capucine COMTE, Alioune DIALLO, Emmanuel LATGE, Jessy MIGNOT, Ingrid NGOBAY, Pierre PETILLON, Louann SUGDEN, Chris WAMAL, and the MIGSO-PCUBED Risk Management Community of Practice.
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