Risk Register: Examples, Benefits, and Best Practices

A project's success or failure typically depends on your ability to manage obstacles that crop up. While you can’t always accurately predict what issues you may encounter, you can control your ability to anticipate potential risks and deal with them effectively.

Tools like risk registers give project managers something to help them mitigate risks that can and will arise during a project. When they come up, you can fix them and move on while experiencing minimal impacts.

What is a risk register?

A risk register, or risk log, is a document set up by project managers to identify and track risks capable of impacting a project. It’s one thing to be aware of problems that could throw your project off track. A risk register lets you put it all in black and white and outline potential solutions beforehand. If the issue appears, you have a contingency plan ready to execute and help you overcome the roadblock.

Using a risk register lets you establish a hierarchy of risks, starting with the most impactful. Your goal should be to have a path to mitigating those risks, reducing the harm they cause, or eliminating them. Your register should also outline what’s considered an acceptable level of risk and how you can set up insurance to help offset the impacts.

Download a free risk register template from HyperComply

Why are risk registers important?

Your risk register also helps you make critical decisions like delaying a project or dealing with a specific risk by pulling in additional resources. Projects tend to get bigger and more complex, making it harder to manage everything. If something gets missed because you don’t have a centralized location for risk tracking, you could make a critical mistake that derails your project.

Even risks that appear minor at the time can have an impact. For example, what happens if critical information gets stolen by a hacker or a new piece of legislation passes that impacts your project? It’s hard to think of an industry that wasn’t affected by supply chain issues last year. What happens if a critical component you rely on gets held up overseas?

Monitoring these problems in a risk register lets you identify issues early in the project. Something that might seem unlikely to occur at the beginning of the project could become a real possibility as time passes. If you’re tracking that risk, you can spot changes early and have a risk management plan ready. In this way, risk registers insulate your business from third-party risks and improve your security posture.

When should a risk register be used?

Risk registers are an integral part of risk management, and you should always have one for complex or critical projects. It’s also helpful to have someone positioned as a risk manager or coordinator for the team. They would be responsible for the upkeep of the risk register. However, for most companies, that role falls upon the project manager.

However, one person should never have to shoulder the responsibility of tracking all potential risks. Other project team members, like personnel from IT or legal, should offer input on risks that could occur and offer ideas on mitigation. Stakeholders or clients may have insights on certain risks that may not be evident to other project team members.

Industries that use risk registers

Every professional tasked with running a project can benefit from using a risk register. Below are some examples of how specific industries use them.

Healthcare

Risks in healthcare have the potential to impact not only a company’s bottom line but the patients' health. A risk register used in a healthcare setting might include the following concerns:

• What might cause harm to staff
• What might cause harm to patients
• Potential litigation
• Loss of services at a facility
• Having personally identifiable information lost or stolen
• Negative media coverage

Construction

If an unexpected risk arises on a construction project, it could impact your ability to complete the job safely and on time. The risk management process can help construction firms have a plan in place for issues like weather events that might slow down progress. Other risks you should include in your risk register created for a construction project include the following:

• Construction crew's experience
• Ability to implement safe working conditions
• Cost of materials and equipment needed for the project
• Ability to obtain materials necessary to complete construction
• Availability of workers needed to finish a project

Finance

Risk management is a critical component of the finance industry. Here, financial institutions aim to ensure financial solvency so they aren't penalized for not following industry regulations. The type of risks captured for the finance industry can vary depending on your line of work but can include:

• Operational expenses
• Banking regulations
• Potential for data theft
• Customers taking their accounts to another financial firm
• Market fluctuations

Software

No line of work is immune to dealing with risk, including software development. What happens if you spend years developing new software, then have a competitor undercut you by bringing a cheaper version to market? Setting up a risk register template for software projects can help you avoid mistakes like incorrectly budgeting the project, leading to ballooning costs.

The project’s scope might also continuously expand until it barely resembles the original idea. Some other risks you should account for when it comes to software projects include:

• Technical risks impacting code quality
• Need for proper documentation
• Having the right-sized team to handle the project
• Lack of knowledge among current staff
• Cost of bringing in personnel to finish a project
• Slow adoption rates of finished product

Consulting

The main goal of most consulting firms is to avoid making their clients unhappy. Risk registers help consultants anticipate issues that could cause dissatisfaction and complaints, including:

• Making sure to have documented requirements outlining the client’s expectations
• Assessing the quality of any sub-contractors or third parties used for the project
• Determining if you will have the supplies needed to complete the project when you need them
• Tracking how well you are doing in adhering to deadlines
• Protecting data against internal or external theft

Components of a risk register

Risk register components capture the elements recorded by project managers when tracking potential issues. Below is an overview of the various components included in a standard risk register template, regardless of industry.

Risk identifier

The risk identification number organizes risks into specific categories to help project managers track identified risks and responses. You can use either numbers or letters based on what makes sense for the project’s structure. The risk identifier should help readers spot a risk quickly when working the risk register.

Description of the risk

This section gives a very brief description of why the risk is an issue. Your description can be as long as you like, but it's best not to get into too much detail here. Stick to the most important details and keep it high-level — just enough to give readers a better understanding of a project’s feasibility and potential returns.

Systems and processes involved

Detail the processes and systems impacted by the project. This should include the people and technology involved and explain how the risk occurs. An example might be tapping into a specific database for information to feed your workflows. You should anticipate risks like needing additional access to system resources, having them available when needed, and having someone on-hand to deal with any technical issues.

Risk category

Risk categories help you quickly identify possible risks. Using categories makes it easier to determine who should bear the responsibility of taking care of the item. That becomes doubly important when working on a large, complex project.

Likelihood of risk occurring

Flagging a risk early gives your project team enough time to mitigate the issue without taking further action. Catching threats early can stop them from becoming a problem that impacts your project deliverables. You can document the likelihood of a common risk occurring using labels similar to the ones below:

• Not likely
• Likely
• Very likely

Potential impact of the risk

Here, you capture the results of a risk analysis performed to capture how a risk could impact your project. That gives you a better sense of which risks to take on first. Come up with a point scale that makes sense for your team, like the example below:

• Extremely low
• Low
• Medium
• High
• Extremely high

Risk response

Your risk response, or risk mitigation plan, is essential to your risk register. Here, you define the steps involved in lowering the risk level, describing the intended outcome and how your plan will change the risk’s impact. More negligible risks can be easier to deal with versus complex items without clear solutions. Your risk log gives your team a point of reference to help with communication and devise ways to solve your problem: mitigate/Reduce, avoid, accept, or transfer the risk (with insurance).

Risk priority level

Risk priority differs from risk potential in that you’re evaluating both the likelihood of a risk occurring and the analysis performed. These aspects help clarify what risks are most likely to lead to adverse project outcomes. You can use a scale similar to the one used to define your risk likelihood.

• 1 (Low)
• 2 (Medium)
• 3 (High)
• 4 (Extremely High)

Owner of risk response

After capturing, reviewing, and prioritizing your risks, you need to assign each mitigation item to someone for implementation. Document the person designated to oversee the risk (the risk owner) and associated team members.

Risk status

Your risk status field communicates whether the person responsible for overseeing the mitigation achieved success. Flags you can use to indicate risk status include the following:

• Open
• In progress
• Complete

Risk register examples

Using a risk register might seem daunting if you’ve never set one up for projects. Below are some risk register templates for potential issues you can use to get started.

Example 1: Encryption data sent to third party

Risk Name: Data encryption

Risk Description: The IT team must develop a process to encrypt data flowing from and to a third-party system.

Risk Category: Cybersecurity

Risk Likelihood: Likely

Risk Analysis: High

Risk Mitigation: Budget hours for IT to write a specialized process for encrypting the information from our database and into the client’s platform.

Risk Priority: 3

Risk Ownership: George Michael

Risk Status: Open

Example #2: Website design deadline

Risk Name: Web designer availability

Risk Description: The web designer tasked with the website layout has been tapped for a different project with a conflicting deadline.

Risk Category: Scheduling

Risk Likelihood: Likely

Risk Analysis: Medium

Risk Mitigation: See if another design team member can fill in or hire a contractor to complete the job.

Risk Priority: 2

Risk Ownership: Janet Goodman

Risk Status: In progress

Example #3: Incorrect Project Timeline Estimation

Risk Name: Project Deliverable Timeline

Risk Description: The timeline initially agreed upon for the project may need to be longer.

Risk Category: Scheduling

Risk Likelihood: Likely

Risk Analysis: Extremely High

Risk Mitigation: Schedule a meeting with the stakeholders and executives to review the roadblocks keeping the team from delivering the project by the original deadline and coming up with a more feasible one.

Risk Priority: 1

Risk Ownership: Bill Baher

Risk Status: In Progress

Benefits of using a risk register

Let’s look at ways different industries can benefit from adopting the practice of relying on risk management templates for their projects.

Identifies patterns from threats

Maintaining a risk register helps you spot threats that could throw your project off track. As you monitor your register, you may begin to see trends. This can help your risk management team adjust your strategies and make necessary changes to address the risks, improving your security posture. 

Helps develop stronger risk mitigation strategies

Documenting risks helps you develop mitigation patterns capable of lowering the threat level they present to your project. You can outline what resources might be needed and have them in place if the threat becomes more tangible.

Instills greater confidence in risk response

A risk register puts you in a position to maintain a proactive stance versus always having to come up with ad-hoc solutions. Your team and stakeholders can feel more confident in your ability to manage issues that might crop up during the project.

Best practices for maintaining effective risk registers

Below are a few suggestions for creating a risk register that makes project management smoother and more efficient.

Update your risk register often

Your risk register should always reflect an accurate snapshot of what’s happening with your project. That only happens if you and your team regularly update the document. Revisit the project risk register continuously — even if you don’t need to change anything.

Set user access rights accordingly

Make sure that team members tasked with identifying and mitigating risks have access to view the risk log and make updates. 

Monitor third-party risk continuously

Keep up with any risks associated with working with third parties or systems during your project. Make sure you keep track of anyone who gets access to your risk register and remove their access once they no longer need it.

Adjust risk management techniques over time

A risk register is an important tool that risk management decision-makers use to track and communicate risk, but how you deal with risks will change as you get new input or work with different team members. Don’t be afraid to adjust and refine your risk register to accommodate the project’s needs. 

Manage and mitigate risk easily with HyperComply

Dealing with risk is an essential element of project management. Identifying potential problems early gives you time to develop mitigation strategies, and risk register templates that cover common risks can help simplify the process.

Risk registers are one critical aspect of an effective risk management strategy, but ensuring the security of your third-party vendors is another: if they're at risk, so are you. HyperComply streamlines security reviews with automation, helping your business speed up the due diligence process and confidently onboard new partners. 

Try out HyperComply today to see how our platform solidifies your company's cybersecurity.