What is primarily included in a risk management framework?

A risk management framework primarily focuses on processes and structures that organizations use to identify, assess, manage, and monitor risks. Within this context, risk identification and assessment processes are fundamental components. These processes help organizations to recognize potential risks that could impact their objectives and to evaluate the likelihood and consequences of these risks.

The effectiveness of a risk management framework hinges on its ability to systematically identify risks and assess their significance, which enables organizations to prioritize their responses based on potential impact. This framework encompasses various methods and tools for analyzing risks, determining risk tolerances, and developing strategies to mitigate or respond to identified risks, ensuring that decision-making aligns with risk appetite and organizational goals.

Elements like financial forecasting, employee performance metrics, and marketing strategy, while important for overall business operations, do not inherently belong to the core scope of a risk management framework. These elements may interact with or be influenced by risk management practices, but they are not foundational parts of the framework itself focused on risk.