Governance Risk-Value Matrix

The Governance Risk-Value Matrix is a strategic tool used to evaluate and categorize business initiatives based on their governance risk and value. This matrix helps organizations prioritize projects by assessing the potential risks against the expected value, ensuring a balanced approach to decision-making.

At a very high level, the Governance Risk-Value Matrix is used in the context of business, governance, risk management.

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What is the Governance Risk-Value Matrix?

A visual explanation is shown in the image above. The Governance Risk-Value Matrix can be described as a matrix with the following quadrants:

  1. High Risk, High Value: Projects with significant potential returns but substantial risks, e.g., entering a new international market.
  2. Low Risk, High Value: Projects with high returns and minimal risks, e.g., improving an existing successful product.
  3. High Risk, Low Value: Projects with high risks and low returns, e.g., investing in outdated technology.
  4. Low Risk, Low Value: Projects with low risks and low returns, e.g., minor process improvements.

What is the purpose of the Governance Risk-Value Matrix?

The Governance Risk-Value Matrix is an essential framework for businesses aiming to balance risk and value in their strategic initiatives. The matrix is divided into four quadrants, each representing a different combination of governance risk and value. By plotting projects or initiatives within this matrix, organizations can visualize which endeavors are worth pursuing and which may require additional scrutiny or resources.

The top-left quadrant represents high-risk, high-value projects. These initiatives can offer significant returns but come with substantial risks. The top-right quadrant includes low-risk, high-value projects, which are ideal as they promise high returns with minimal risk. The bottom-left quadrant contains high-risk, low-value projects, which are typically avoided due to their unfavorable risk-reward ratio. Finally, the bottom-right quadrant represents low-risk, low-value projects, which may be pursued if resources allow but are generally not prioritized.

Use cases for the Governance Risk-Value Matrix include project portfolio management, strategic planning, and risk assessment. For example, a company considering multiple new product launches can use this matrix to determine which products to prioritize based on their risk and value profiles. Similarly, during strategic planning sessions, leadership teams can use the matrix to allocate resources more effectively, ensuring that high-value, low-risk projects receive the necessary support.


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What templates are related to Governance Risk-Value Matrix?

The following templates can also be categorized as business, governance, risk management and are therefore related to Governance Risk-Value Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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