Risk management is the systematic process of identifying, assessing, and mitigating threats or uncertainties that can affect your organization. It involves analyzing risks’ likelihood and impact, developing strategies to minimize harm, and monitoring measures’ effectiveness.
High-performing businesses with high-pressure cultures are especially vulnerable.
Here are four reasons that Risk Management is important:
1. Protects organization’s reputation.
2. Minimizes losses.
3. Encourages innovation and growth.
4. Enhances decision-making.
Businesses can’t operate without risk. Economic, technological, environmental, and competitive factors introduce obstacles that companies must not only manage but overcome.
Organizations that embrace strategic risk management are five times more likely to deliver stakeholder confidence and better business outcomes and two times more likely to expect faster revenue growth.
Source: online.hbs.edu
