What is the first step when developing a risk monitoring program?

The first step in developing a risk monitoring program involves conducting a capability assessment. This is crucial because a capability assessment allows an organization to evaluate its current risk management processes, resources, and strategies. By determining the existing capabilities, the organization can identify gaps and prioritize areas that require attention.

This foundational understanding not only shapes the direction of the risk monitoring program but also informs the selection of appropriate key indicators to monitor, the gathering of baseline data, and the analysis and reporting of findings. Without this initial assessment, subsequent steps might lack context or fail to address the actual needs of the organization, potentially leading to ineffective monitoring and response mechanisms. Therefore, establishing a thorough understanding of the organization's capabilities is essential for building a solid framework for risk monitoring.