- "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."
Process of identifying and analyzing potential risks that could negatively impact a business.
Risk analysis: This topic establishes the process of identifying, assessing, and prioritizing risks, based on their potential impact on the organization.
Risk assessment: Risk assessment evaluates risks by examining their likelihood of occurring and the potential negative consequences on the organization, as well as the organization's capacity to deal with them.
Risk identification: The process of recognizing, assessing, and documenting risks that could negatively impact an organization is called risk identification. It is the first step in risk management.
Risk categorization: The process of categorizing risks according to their severity, likelihood of occurrence, and damage potential is called risk categorization. This method assists organizations in identifying and prioritizing high-risk activities.
SWOT analysis: A SWOT analysis is a strategic technique that examines a company's strengths, weaknesses, opportunities, and threats. It is an effective tool for identifying company characteristics that can exacerbate risks.
Risk mitigation: Risk mitigation is the process of reducing or eliminating potential risks by implementing specific measures.
Risk response planning: Risk response planning is the process of developing contingency plans that will assist businesses in managing risks when they occur.
Enterprise risk management: Enterprise risk management (ERM) is a comprehensive approach to managing risks across an entire organization.
Business continuity planning: Business continuity planning is an organizational process, which activities are aimed at avoiding the disruption of business operations and safeguarding critical assets during a crisis.
Operational risk management: Operational risk management is the process of identifying and analyzing risks, assessing financial performance, and implementing solutions to decrease the likelihood of loss.
Financial risk management: Financial risk management is the process of identifying, measuring, and managing risks related to the financial position of an organization.
Cybersecurity risk management: Cybersecurity risk management is the process of identifying and managing risks related to information technology and computer systems.
Risk reporting: Risk reporting is the process of collecting and presenting data on risks identified in an organization for decision making on risk management strategies.
Stakeholder analysis: Stakeholder analysis examines the role and significance of stakeholders in the process of identifying, assessing, and managing risks, along with their likely impact on the organization.
Risk communication: Risk communication is the process of sharing relevant information with stakeholders regarding risks and their potential impact on the business.
Risk management culture: Risk management culture is a set of norms, values, and behaviors that prioritize risk management in an organization.
Risk management plan: A risk management plan outlines how an organization will manage and mitigate threats and provides an operational strategy for responding to risks.
Risk appetite: Risk appetite is the measure of an organization's tolerance for risk, which directly affects its risk management strategy.
Risk heat maps: Risk heat maps are visual representations of the likelihood and impact of risks. They demonstrate risks that have low or high likelihood and impact, allowing for better risk management decision-making.
Risk register: A risk register is a document that lists and prioritizes risks, including cause, impact, risk owner, and response actions planned.
Qualitative Risk Identification: This is a subjective and non-quantitative approach to identify risks. It involves identifying and analyzing the likelihood and impact of risks based on expert opinions, experience, and intuition.
Quantitative Risk Identification: This is a quantitative approach to identify risks. It involves using statistical techniques to identify and analyze the likelihood and impact of risks. This approach is more objective and data-driven compared to a qualitative approach.
Top-Down Risk Identification: This approach involves identifying risks from a high-level perspective. It focuses on the major risks that could impact the entire organization or a specific business unit. It is useful for strategic planning and decision-making.
Bottom-Up Risk Identification: This approach involves identifying risks from a low-level perspective. It focuses on the operational risks that could impact specific processes, departments, or projects. It is useful for operational planning and risk management.
Internal Risk Identification: This approach involves identifying risks that originate within the organization, such as operational risks, financial risks, compliance risks, or reputational risks. Internal risks are controllable by the organization.
External Risk Identification: This approach involves identifying risks that originate outside the organization, such as political risks, economic risks, social risks, technological risks, or environmental risks. External risks are beyond the control of the organization.
Known Risk Identification: This approach involves identifying risks that have occurred in the past, or that are currently present in the organization's environment. Known risks can be identified through historical data, benchmarking, or industry research.
Unknown Risk Identification: This approach involves identifying risks that have not occurred in the past or that are not currently present in the organization's environment. Unknown risks can be identified through scenario planning, brainstorming, or expert opinion.
Event-Based Risk Identification: This approach involves identifying risks that are related to specific events or activities, such as product launches, mergers and acquisitions, or project implementations. Event-based risks can be identified through risk assessments or risk workshops.
Residual Risk Identification: This approach involves identifying risks that remain after implementing risk mitigation strategies. It is useful for assessing the effectiveness of risk management controls and identifying residual risks that require further action.
- "...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."