Risk management is a systematic process of identifying, assessing, and prioritizing potential risks in order to minimize or control their impact on an organization’s objectives. This involves:
Risk Identification: Identifying and documenting potential risks that could affect the achievement of goals or objectives.
Risk Assessment: Evaluating the likelihood and impact of each identified risk to determine its significance.
Risk Prioritization: Ranking risks based on their severity and potential impact, allowing for focused attention on the most critical ones.
Risk Mitigation: Developing and implementing strategies to reduce, transfer, or mitigate the impact of identified risks.
Monitoring and Review: Continuously monitoring the effectiveness of risk mitigation measures and adjusting strategies as needed.
In essence, risk management aims to enhance decision-making by proactively addressing potential challenges and uncertainties, ensuring a more resilient and adaptive organizational environment.
