- "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 taking action to reduce or eliminate identified risks.
Identification and assessment of potential risks: This involves identifying potential risks that may arise in the business environment and assessing their level of significance and impact on the organization.
Risk mapping and prioritization: This involves mapping the identified risks and prioritizing their management based on their potential impact on the organization.
Risk response planning: This involves developing a plan to mitigate the identified risks that have been prioritized, based on their impacting factor on the organization.
Risk monitoring and control: This involves closely monitoring the identified risks as well as the effectiveness of the planned risk mitigation strategy and controlling them accordingly.
Implementation of a Business Continuity Plan (BCP): This involves developing a BCP that outlines how the business will respond to any unexpected risks, to minimize disruption to the business.
Compliance with regulatory requirements: This involves ensuring that the organization is compliant with any relevant regulatory requirements.
Cybersecurity measures: This involves managing risks associated with cyber threats by implementing cybersecurity measures.
Insurance: This involves taking out appropriate insurance policies to provide financial protection against specific risks.
Disaster recovery planning: This involves developing a plan for recovering from disasters, such as floods or fires, and ensuring that the organization can continue operating during such events.
Crisis management: This involves developing a plan to deal with unexpected events that could potentially damage the organization's reputation, including developing effective communication strategies to mitigate these risks.
Contingency planning: This involves developing a plan for unforeseen events such as power outages, equipment failure, etc.
Internal controls: This involves establishing procedures to detect and prevent fraudulent or unethical behavior.
Risk culture: This involves fostering an organizational culture that promotes risk awareness, accountability, and effective risk management.
Risk appetite: This involves defining the level of risk that the organization is willing to tolerate.
Risk reporting and communication: This involves developing a comprehensive reporting and communication framework for communicating risks to stakeholders.
Avoidance: The process of completely eliminating the risk by avoiding the activity that caused it or choosing an alternative activity that poses less risk.
Transfer: The process of transferring the responsibility for managing the risk to a third party, such as an insurance company.
Reduction: The process of taking steps to reduce the likelihood or impact of a risk occurring. Examples include improving processes, adding security measures or creating redundancy.
Acceptance: The process of acknowledging a risk and deciding not to take action to mitigate it.
Prevention: The process of taking proactive measures to prevent a risk from occurring, such as implementing policies or procedures to ensure compliance with regulations.
Containment: The process of limiting the impact of a risk before it becomes a larger problem.
Disposition: The process of choosing an outcome for a risk event that has occurred.
Sharing: The process of sharing a risk with another entity or entities to decrease the impact of the risk.
Preparation: The process of planning and preparing for potential risks by creating contingency plans.
Response: The process of responding to a risk event when it occurs to minimize its impact.
- "...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."