1. Risk Assessment Frameworks
Rodney Petersen
Government Relations Officer
Security Task Force Coordinator
EDUCAUSE

2. Overview Definition(s) of Risk Management & Risk Impact(s) of Risk
Enterprise Risk Management
ERM Frameworks
DHS Risk Management Framework
NIST Risk Assessment Framework
STF Risk Assessment Framework

3. Definition of Risk Management
Risk management is a scientific approach to dealing with pure risks by anticipating possible accidental losses and designing and implementing procedures that minimize the occurrence of loss or the financial impact of the losses that do occur. (Fundamentals of Risk and Insurance, Vaughan and Vaughan)
Meaning: Risk as uncertainty concerning the occurrence of a loss.

4. Risk Equation
Risk = Vulnerability x Threat x Impact *Probability
Vulnerability = An error or a weakness in the design, implementation, or operation of a system.
Threat = An adversary that is motivated to exploit a system vulnerability and is capable of doing so
Impact = the likelihood that a vulnerability will be exploited or that a threat may become harmful.
*Probability = likelihood already factored into impact.

5. Types of Risk Strategic – Goals of the Organization
Operational – Processes that Achieve Goals
Financial – Safeguarding Assets
Compliance – Laws and Regulations
Reputational – Public Image

6. Responses to Risk Severity Frequency High Transfer Avoid Low Accept
Accept/Transfer

7. Enterprise Risk Management (ERM)
A process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risks to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives. (COSO)
A rigorous approach to assessing and addressing the risks from all sources that threatent he achievement of an organization’s strategic objectives. In addition, ERM identifies those risks that represent corresponding opportunities to exploit for competitive advantage. (Tillinghast-Towers Perrin consultancy group)
Any issue that impact an organization’s ability to meet its objectives. (Developing A Strategy to Manage Enterprisewide Risk in Higher Education, NACUBO)

8. ERM Frameworks COSO’s ERM – Integrated Framework
Australia/New Zealand Standard – Risk Management
ISO Risk Management - Draft Standard
The Combined Code and Turnbull Guidance
A Risk Management Standard by the Federation of European Risk Management Associations (FERMA)

9. COSO Integrated Control Framework
Committee of Sponsoring Organizations of the Treadway Commission (COSO)

10. COSO’s ERM – Integrated Framework
Entity objectives can be viewed in the
context of four categories:
Strategic
Operations
Reporting
Compliance
ERM considers activities at all levels of the organization:
Enterprise-level
Division or subsidiary
Business unit processes
Committee of Sponsoring Organizations of the Treadway Commission (COSO)

11. Australia/New Zealand Standard (ASS/NZS 4360:2004) – Risk Management

12. ISO Risk Management - Draft Standard

13. The Combined Code and Turnbull Guidance
Risk assessment
Does the company have clear objectives and have they been communicated so as to provide effective direction to employees on risk assessment and control issues? For example, do objectives and related plans include measurable performance targets and indicators?
Are the significant internal and external operational, financial, compliance and other risks identified and assessed on an ongoing basis? These are likely to include the principal risks identified in the Operating and Financial Review.
Is there a clear understanding by management and others within the company of what risks are acceptable to the board?

14. A Risk Management Standard by the Federation of European Risk Management Associations (FERMA)

15. Risk Management Framework for Critical Infrastructure Protection
National Infrastructure Protection Plan, 2006

16. NIST Risk Management Framework
Define criticality /sensitivity of information system according to potential impact of loss
FIPS 199 / SP
CATEGORIZE Information System
Starting Point
SP / SP A
FIPS 200 / SP
SELECT Security Controls
Select baseline (minimum) security controls to protect the information system; apply tailoring guidance as appropriate
MONITOR
Security Controls
Continuously track changes to the information system that may affect security controls and reassess control effectiveness SP
AUTHORIZE Information System
Determine risk to agency operations, agency assets, or individuals and, if acceptable, authorize information system operation
SP / SP
SUPPLEMENT Security Controls
Use risk assessment results to supplement the tailored security control baseline as needed to ensure adequate security and due diligence
Determine security control effectiveness (i.e., controls implemented correctly, operating as intended, meeting security requirements)
SP A
ASSESS
Security Controls
Document in the security plan, the security requirements for the information system and the security controls planned or in place SP
DOCUMENT Security Controls
Implement security controls; apply security configuration settings
IMPLEMENT Security Controls SP

17. Risk Assessment Framework – Security Task Force
Purpose of Framework: to provide a high-level overview on the subject of conducting a risk assessment of information systems within higher education.
Points to Consider:
Risk Assessment (RA) is an ongoing process
RA requires strong commitment from senior administration and collaboration between cross-functional units
RA is part of strategic and continuity planning
RA requires planning and strategy that systematically increases the scope
RA needs to become a part of the culture of the university community
Effective Risk Management (RM) practices require a "risk aware" culture
Effective RM can provide the basis for prioritizing and resolving possible funding conflicts
policy supporting ongoing risk assessment should be developed

18. Phases of Risk Assessment
Phase 0: Establish Risk Assessment Criteria for the Identification and Prioritization of Critical Assets (a one-time process)
Phase 1: Develop Initial Security Strategies
Phase 2: Technological View - Identify Infrastructure Vulnerabilities
Phase 3: Risk Analysis - Develop Security Strategy and Plans

19. Phase 0: Establish Risk Assessment Criteria
Goal: to quickly establish the overall criteria for the identification of critical data assets and their appropriate priority level and to obtain senior management's perspective on issues of strategic importance.
Process 1: Establish Risk Assessment Criteria
Process 2: Apply the Critical Asset Criteria to Classify Data Collections and Related Resources

20. Phase 1: Develop Initial Security Strategies
Goal: Once the information assets have been classified, strategic planning for the rest of the risk management process can begin. Vulnerabilities can be identified, and the process of mitigating the threats that can exploit those vulnerabilities can begin. An institution can decide to specifically focus on the very highest risks, or it may decide to focus first on mitigating risks broadly (or both). The mere process of bringing management together to discuss the organization's strategy about risk mitigation can be extremely fruitful.
Process 1: Strategic Perspective - Senior Management
Process 2: Operational Perspective - Departmental Management
Process 3: Practice Perspective – Staff
Process 4: Consolidated View of Security Requirements

21. Phase 2: Identify Infrastructure Vulnerabilities
Goal: To identify areas of potential exposure associated with the systems architecture.
Process 1: Evaluation of Key Technology Components
Process 2: Evaluation of Selected Technology Components

22. Phase 3: Develop Security Strategy and Plans
Goal: After identifying key information systems resources and evaluating the degree of vulnerability with the systems, quantitatively determine the level of risk associated with each system and system component. This information may then be used to prioritize the allocation of resources to ensure appropriate mitigation of the highest risks and to make appropriate management decisions about the degree of risk that the organization will be willing to accept.
Process 1: Risk Assessment Steps
1. Assess the potential impact of threats (and vulnerabilities) to critical assets (qualitative and/or quantitative)
2. Evaluate the likelihood of occurrence of the threats (high, medium, low)
3. Create a consolidated analysis of risks, based on the impact value to critical assets and the likelihood of occurrence
Process 2: Protection Strategy and Mitigation Plans

23. Conclusion
It is important to note that this is a process that has no finish line. While a risk assessment - the process of identifying and quantifying risks - might take place on an infrequent basis (e.g., annually), the risk management process - the ongoing process of mitigating the risks to the organization - should be ingrained into the institution's culture to be most effective.