Risk management is the identification, assessment, and prioritization of risks, the effect of uncertainty on objectives followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
Risk management’s objective is to assure uncertainty does not deflect the endeavor from business goals.
Risk Management Principles
- Creates and protects value
- Integral part of organisational processes
- Part of Decision Making Process (DMP)
- Explicitly addresses uncertainty
- Systematic, Structured and Timely
- Based on the best information
- Takes human and cultural factors into account
- Transparent and inclusive
- Dynamic, iterative and responsive to change
- Facilitates improvement of a company or organisation