- "Risk management is the identification, evaluation, and prioritization of risks... followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities."
This is the process of identifying and mitigating risks to an organization, often through data analysis and modeling.
Types of risks -: Risks could be financial, operational, compliance, and strategic. Understanding the different types of risk is essential to identify it and determine a course of action.
Risk assessment -: The thorough analysis of the different types of risk, and assessing their likelihood and impact on a business is a fundamental step in managing risk.
Risk identification techniques -: Different techniques are used to identify risks, including brainstorming, surveys, data analysis, and historical analysis.
Risk tolerance -: Understanding the amount of risk that a business is willing to tolerate is critical in developing an effective risk management strategy.
Risk analysis -: Risk analysis involves analyzing and quantifying the identified risks to determine the best course of action to manage them.
Risk mitigation strategies -: Different risk mitigation strategies, such as avoiding, transferring, reducing, or accepting risks should be weighed to determine the most effective course of action.
Risk monitoring and reporting -: Continuous monitoring of risks is imperative, and proper reporting to stakeholders is a necessary aspect of risk management.
Risk management frameworks -: Different risk management frameworks, such as COSO, ISO 31000, and PMI are available for businesses to adopt to develop and implement their risk management strategies.
Quantitative risk analysis -: This involves using statistical or probability analysis to quantify the risk levels and determine the best course of action.
Enterprise risk management -: A systematic approach to identifying, assessing, and managing all types of risks that a business may face at the enterprise level.
Risk governance -: The processes, policies, and procedures used to govern and manage risks within a business.
Compliance risk management -: A subset of risk management that focuses on ensuring the business complies with legal and regulatory requirements.
Project risk management -: The process of identifying, analyzing, and mitigating risks that are particular to a project.
Reputation risk management -: The process of managing the risks that could damage the reputation of a business, such as negative publicity or public image.
Cybersecurity risk management -: A specialized field of risk management that deals with vulnerabilities and threats to the company's network and data.
Disaster recovery planning -: Developing a plan to recover the business after a natural disaster, power outage, or other catastrophic event.
Crisis management -: The management of a crisis situation, including planning for adverse scenarios, minimizing the impact, and restoring normal operations.
Environmental risk management -: The management of risks to the environment caused by the business operations, products or services.
Risk communication -: The effective communication of the risks to stakeholders, employees, and customers is essential in risk management.
Risk financing -: The assessment of the overall financial impact of risks and the implementation of financial mechanisms to transfer, mitigate or retain risk.
Strategic Risk Management: This involves identifying and assessing the potential risks that may arise from the business strategy or the business model itself.
Operational Risk Management: This refers to the identification and management of risks arising from the operations of a business, including systems, processes, and procedures.
Financial Risk Management: This involves analyzing and managing financial risks, such as market risk, credit risk, and liquidity risk.
Compliance Risk Management: This involves making sure that the business is compliant with all relevant regulations, laws, and industry standards.
Data Risk Management: This involves identifying and managing the risks associated with sensitive data, such as personally identifiable information and confidential business information.
Reputation Risk Management: This involves managing potential risks to the company's reputation, such as negative publicity or damaged relations with stakeholders.
Cybersecurity Risk Management: This involves identifying and managing the risks associated with cyber threats, such as hacking, malware, and data breaches.
Environmental, Social and Governance (ESG) Risk Management: This involves identifying and managing the risks associated with environmental, social and governance factors, such as climate change impacts, worker safety, and ethical business practices.
Supply Chain Risk Management: This involves identifying and managing the risks associated with the supply chain, such as disruptions in supply or demand, geopolitical risks, and quality control failures.
Human Resource Risk Management: This involves identifying and managing risks associated with workforce issues, such as employee turnover, cultural fit, and skills shortages.
- "...risks (defined in ISO 31000 as the effect of uncertainty on objectives)..."
- "Risks can come from various sources including uncertainty in international markets, threats from project failures, legal liabilities, credit risk, accidents, natural causes and disasters, deliberate attack from an adversary, or events of uncertain or unpredictable root-cause."
- "Negative events can be classified as risks while positive events are classified as opportunities."
- "Risk management standards have been developed by various institutions, including the Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards."
- "Strategies to manage threats typically include avoiding the threat, reducing the negative effect or probability of the threat, transferring all or part of the threat to another party, and even retaining some or all of the potential or actual consequences of a particular threat."
- "As a professional role, a risk manager will 'oversee the organization's comprehensive insurance and risk management program, assessing and identifying risks that could impede the reputation, safety, security, or financial success of the organization'."
- "Risk Analysts support the technical side of the organization's risk management approach... analysts share their findings with their managers, who use those insights to decide among possible solutions."
- "Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety."
- "Certain risk management standards have been criticized for having no measurable improvement on risk, whereas the confidence in estimates and decisions seems to increase."
- "Opportunities are uncertain future states with benefits."
- "See also Chief Risk Officer, internal audit, and Financial risk management ยง Corporate finance."
- "Risk managers develop plans to minimize and/or mitigate any negative (financial) outcomes."
- "The primary goal of risk management is to minimize the probability or impact of unfortunate events or maximize the realization of opportunities."
- "Risk evaluations are conducted to assess and identify risks that could impede the reputation, safety, security, or financial success of the organization."
- "Managers use insights from risk analysts to decide among possible solutions."
- "The main components of risk management include the identification, evaluation, and prioritization of risks, followed by the application of resources to minimize, monitor, and control the probability or impact of events."
- "Negative consequences of threats can include financial, reputational, safety, security, or operational impacts."
- "ISO standards provide quality management standards to help work more efficiently and reduce product failures."
- "Negative events can be classified as risks while positive events are classified as opportunities."