7 Top Risk Management Frameworks to Know
Navigating the world of business risk without a map is a surefire way to get lost. From cyber threats and supply chain disruptions to regulatory changes and the ethical minefields of AI, the landscape of potential hazards is more complex than ever. A solid risk management framework provides the blueprint your organization needs to not just survive, but thrive amidst this uncertainty.
But with a sea of acronyms out there—COSO, ISO, NIST—how do you choose the right one? The goal isn’t just to pick a framework, but to adopt a structured approach that helps you identify, assess, and manage risks in a way that aligns with your specific business goals. Instead of reinventing the wheel, leaning on established industry frameworks provides a proven, defensible structure for your risk management program.
Think of this list as your guide to the most respected and widely used risk management frameworks today. We’ll break down what each one is, who it’s for, and what makes it unique.
1. COSO ERM Framework
The COSO Enterprise Risk Management (ERM) Framework is the go-to for organizations seeking a holistic, top-down view of risk. Developed by the Committee of Sponsoring Organizations of the Treadway Commission, it’s designed to help you integrate risk management into your most important business processes, from strategic planning to daily operations.
The core idea behind COSO is that every organization exists to provide value to its stakeholders, and risk is an inherent part of that pursuit. The framework is built around five key components:
Governance and Culture: Setting the tone from the top and establishing accountability.
Strategy and Objective-Setting: Integrating risk management into your strategic planning.
Performance: Identifying and assessing risks that could impact your objectives.
Review and Revision: Continuously monitoring and improving your risk management processes.
Information, Communication, and Reporting: Sharing risk information across the organization.
Best for: Organizations of all sizes that need a comprehensive, enterprise-wide approach to managing risks that could impact their strategic goals.
2. ISO 31000
The international standard ISO 31000 provides principles and generic guidelines that can be applied to any organization, regardless of size, industry, or sector. It’s less about a rigid set of controls and more about establishing a risk management culture where employees and stakeholders are equipped to monitor and manage risk proactively.
Its key principles emphasize an approach that is integrated, structured, customized, inclusive, and dynamic. The framework is designed to be flexible, allowing organizations to tailor it to their specific needs and objectives. Because it’s recognized globally, it’s particularly useful for multinational corporations that need a consistent approach across different regions and regulatory environments.
Best for: Organizations looking for a flexible, universally recognized set of guidelines to build a strong risk management culture.
3. NIST Risk Management Framework (RMF)
When it comes to cybersecurity risk, the NIST Risk Management Framework (RMF) is a titan. Developed by the U.S. National Institute of Standards and Technology, the RMF provides a structured, seven-step process for integrating security and privacy into the entire system development lifecycle. Originally created for federal agencies, it has been widely adopted by private sector organizations, especially in highly regulated industries.
The seven steps of the NIST RMF are: Prepare, Categorize, Select, Implement, Assess, Authorize, and Monitor. This lifecycle approach ensures that security isn’t just a one-time checklist but an ongoing process that adapts to evolving threats.
Best for: U.S. federal agencies and organizations in regulated industries (like finance and healthcare) that need a detailed, repeatable process for managing cybersecurity and privacy risks.
4. Factor Analysis of Information Risk (FAIR)
What if you could talk about cyber risk in the same way you talk about other business risks—in financial terms? That’s the power of FAIR. Unlike qualitative frameworks that rank risk as “high,” “medium,” or “low,” FAIR is a quantitative model that helps you analyze and measure information risk in dollars and cents.
This is a game-changer for security leaders who need to communicate the value of their security initiatives to the board. By quantifying risk, you can more clearly articulate the potential financial impact of a security event and make a stronger business case for security investments. The methodology involves assessing two key factors: Loss Event Frequency (how often an event is likely to happen) and Probable Loss Magnitude (the likely financial fallout). FAIR doesn’t replace other frameworks like NIST; rather, it complements them by adding a layer of financial analysis.
Best for: Organizations that want to quantify cyber risk in financial terms to improve decision-making and communication with executive leadership.
5. COBIT (Control Objectives for Information and Related Technologies)
COBIT is an IT governance and management framework developed by ISACA. Its primary goal is to bridge the often-significant gap between business goals and IT management. It helps organizations ensure that their IT effectively supports their business objectives while optimizing resources and managing IT-related risks.
COBIT provides a set of processes, controls, and objectives to help organizations govern and manage their information and technology. The framework is built on principles like meeting stakeholder needs and covering the enterprise from end-to-end, ensuring that IT governance is integrated with overall business governance.
Best for: Organizations that need to establish strong IT governance, align IT with business strategy, and ensure IT-related risks are managed effectively.
6. CIS Controls (Center for Internet Security Controls)
If you’re looking for a practical, prioritized, and actionable set of cybersecurity best practices, the CIS Controls are for you. The controls are a simplified set of safeguards that are designed to mitigate the most common and damaging cyber attacks. The list was developed and is maintained by a global community of cybersecurity experts.
The CIS Controls are broken down into 18 top-level controls (like Inventory and Control of Enterprise Assets and Data Protection) and are organized into Implementation Groups (IGs). This structure allows organizations to focus on the most critical actions first, making it an excellent starting point for businesses looking to build or mature their cybersecurity program.
Best for: Any organization that wants a prioritized, no-nonsense list of defensive actions to improve its cybersecurity posture quickly and effectively.
7. NIST AI Risk Management Framework (AI RMF)
The explosion of artificial intelligence has introduced a new frontier of risks—from biased algorithms and privacy violations to security vulnerabilities in AI models. Released in January 2023, the NIST AI Risk Management Framework is a voluntary guide designed to help organizations address these unique challenges.
The framework’s goal is to help organizations design, develop, and deploy AI systems that are trustworthy, secure, and responsible. It focuses on seven key characteristics of trustworthy AI: validity and reliability, safety, security and resilience, accountability and transparency, explainability and interpretability, privacy-enhancement, and fairness. The AI RMF is structured around four core functions: Govern, Map, Measure, and Manage, providing a flexible playbook for responsible AI innovation.
Best for: Any organization that is developing, deploying, or using AI systems and wants to manage the associated risks in a structured and ethical way.
How to Choose the Right Framework
Selecting the right framework depends on your organization’s unique goals, industry, and risk profile. Ask yourself:
What are my primary risks? If your main concern is cybersecurity, NIST RMF or CIS Controls are strong contenders. For broader, enterprise-level risks, look to COSO ERM or ISO 31000.
What are my regulatory requirements? Your industry may dictate which framework you need to use. For example, organizations handling federal data in the U.S. often turn to the NIST RMF.
How mature is my risk program? If you’re just starting out, the prioritized nature of the CIS Controls can provide a clear roadmap. More mature programs might integrate multiple frameworks, using FAIR to add a quantitative layer to their NIST-based program, for instance.
Implementing any of these frameworks requires commitment and resources. The key is to find a system that provides structure without creating unnecessary friction. This is why many modern security teams are turning to AI-powered platforms to automate the administrative burdens of risk management—like evidence collection and reporting. By automating manual tasks, teams can focus their energy on what truly matters: making strategic decisions to mitigate risk and protect the organization.
Managing adherence to these frameworks often comes down to one thing: proving it. The challenge, as the article mentions, is the manual, repetitive work of collecting evidence and answering an endless stream of security questionnaires. This is where AI-powered automation can be a game-changer. Instead of slowing down your sales cycle with security reviews, you can accelerate it.
Targhee Security helps teams do exactly that. By creating a centralized Trust Center and using AI to automate security questionnaire responses, Targhee transforms the burden of compliance into a tool for building trust and closing deals faster. Ready to streamline your risk management and compliance operations? Learn how at targheesec.com.
