What is the third step in the ORM process?

The third step in the Operational Risk Management (ORM) process is to make risk decisions. This step involves evaluating the identified hazards and the associated risks, and then determining the appropriate actions to take in order to mitigate those risks. At this stage, decision-makers weigh the potential consequences of various courses of action, considering both the benefits and risks involved. This process is crucial as it allows individuals or teams to prioritize which risks need immediate attention and which can be managed with less urgency. By effectively making these decisions, organizations can ensure a safer operational environment and better resource allocation for risk management efforts.

In the ORM framework, the preceding steps include assessing hazards, which identifies potential risks, and implementing controls, which establishes measures to mitigate those risks. Supervision follows the decision-making phase, ensuring that the decisions made are carried out effectively and consistently monitored for ongoing effectiveness. Thus, making risk decisions serves as a pivotal link between risk identification and effective management, driving the ORM process forward.