Why Every Organization Needs a Standard Risk Framework

One of the first questions Bazzi Consulting asks its customers is: how do you structure your risk taxonomy? To our surprise, frequently we face the reality that a large number of organizations still manage risk as “flat lists”, linking them directly to business units without structure. This creates blind spots, duplicate risks and inconsistent scoring. A standard risk framework, a hierarchy of risk statements and categories, changes that. It enables transparency, comparability, and strategic oversight (Boultwood and Switzer, 2025).

Why does a Risk Taxonomy Matter?

A clear taxonomy gives every stakeholder a common language for risk. Without it, each unit defines risks differently, and leadership cannot see the full picture (Open Risk Manual, 2025). Studies show that standardised risk hierarchies improve aggregation and decision-making while reducing governance costs (Herzfeldt et al., 2012).

Flat mapping hides systemic exposure. Risks with different names but identical causes — like “supplier delays” and “vendor outages” — get treated separately, wasting resources. Without taxonomy alignment, IRM dashboards and analytics become fragmented, limiting real-time insights.

A standard framework delivers:

• Consistent risk identification and scoring across units.
• Better aggregation and analytics for management.
• Stronger governance and accountability.
• Easier tool integration.

How does Bazzi Consulting help?

During various engagements, customers openly highlighted to us their wish that Bazzi Consulting help them standardize their risk framework. While we initially focused on GRC tool implementations, we are proud to announce that we are expanding our service offerings to include Risk Advisory. As part of the new stream, Bazzi Consulting will help customers structure their Risk and Control Frameworks. In addition, the offering will leverage the Bazzi Consulting established GRC digital transformation practice to connect processes and people with the data.

References:
Boultwood, B. and Switzer, J. (2025) ‘ERM: The Importance of Building a Risk Taxonomy’, Risk Intelligence, 17 April.
Herzfeldt, A. et al. (2012) ‘Developing a Risk Management Process and Risk Taxonomy for Medium-Sized IT Solution Providers’, ECIS Proceedings.