When to Use a Risk Register
A Risk Register should be used from the very beginning of a Capital Project and throughout its lifecycle. A Risk Register is most often first created during the project planning phase and is updated regularly as new risks emerge and existing risks evolve. The Risk Register is common feature of Project Reports, is essential during project review meetings, and is a critical tool for decision-making in risk management / contingency planning processes.
Information About Risk Register
Key components and functionalities of a Risk Register include:
- Risk ID: A unique identifier for each risk.
- Description: A detailed description of the risk.
- Cause: The source or cause of the risk.
- Risk Likelihood: The probability of a risk event occurring, ranging from very unlikely to almost certain often on a 5x5 Risk Matrix.
- Risk Impact (Consequence): The potential impact of the risk on project objectives, such as cost, time, scope, and quality, should the risk event occur. Impacts can range from negligible to catastrophic, depending on the severity of the consequences, often performed again on a 5x5 Risk Matrix.
- Risk Rating (Score): Each risk is assigned a risk rating based on its position in the matrix, determined by its likelihood and impact. This rating helps in prioritizing risks, with higher ratings indicating a need for more immediate attention and mitigation strategies.
- Color Coding: Risk Matrix Tables often use color coding to visually distinguish between different levels of risk severity. Commonly, green represents low-risk areas, yellow indicates medium risks, and red highlights high-risk areas that require immediate attention.
- Risk Mitigation Strategies: The matrix facilitates the development of mitigation or management strategies tailored to the risk's priority level. It helps project teams to allocate resources and plan actions more effectively to address the risks identified.
- Owner: The person or team responsible for managing the risk.
- Status: Current status of the risk (active, in progress, closed).
- Date Identified: When the risk was first identified.
- Review Date: Scheduled date for next review of the risk.
How to Prepare a Risk Register
To prepare a Risk Register, we recommend downloading a free best practice risk register template to save time starting from scratch. Once you have a template in place, follow these steps:
- Identify Risks: Conduct brainstorming sessions with the project team and stakeholders to list potential risks. Techniques like SWOT analysis, expert interviews, and review of historical data from similar projects can be helpful.
- Assess Risks: Analyze each risk in terms of its probability of occurrence and potential impact on the project using a Risk Matrix. Use qualitative descriptions, quantitative measures, or risk matrices to evaluate risks.
- Prioritize Risks: Prioritize the risks based on their assessed probability and impact. Focus on risks that have both high likelihood and high impact.
- Assign Ownership: Assign a responsible owner to each risk to ensure accountability for monitoring and mitigating the risk.
- Develop Mitigation Strategies: For each high-priority risk, develop and document strategies to mitigate or manage the risk.
- Review and Update: Regularly review and update the Risk Register to reflect the changing project environment and the status of risk management efforts.
Free Template for Risk Register
While specific software tools and platforms may offer advanced features for managing a Risk Register, you can start with a basic outline for a free Risk Register template that you can re-create using spreadsheet software like Microsoft Excel or Google Sheets:
