Risk management recognizes, assesses, and controls dangers to an organization's capital and profitability. Risk factors include financial instability, legal responsibilities, technical hurdles, strategic management failures, accidents, and natural disasters.

A good risk management program helps a business examine all the hazards it confronts. Risk management also addresses the link between risks and their ability to cascade repercussions on an organization's strategic goals.

This complete approach to risk management is sometimes referred to as enterprise risk management because of its emphasis on anticipating and assessing risk across an organization. Enterprise risk management (ERM) highlights the necessity to manage positive risk alongside internal and external threats. Positive risks are opportunities that, if embraced, may raise a company's worth or, on the other side, might damage it if not taken. Indeed, any risk management program aims to sustain and generate value for the organization by making smart risk decisions rather than eliminating all risks.

"We do not manage risks so that we can avoid them." We manage risks so that we can evaluate if they are worthwhile.

As a consequence, risk management must be incorporated into organizational strategy. To connect them, risk managers must first identify the organization's risk appetite or the amount of risk it is willing to tolerate to fulfill its goals.

In a post on how to assess which risks fit within an organization's risk appetite and which require extra controls and protections before they are acceptable, Notre Dame University Senior Director of IT Mike Chapple highlighted the importance of clearly defining an organization's appetite for risk. Others will be diminished; some may be shared with other parties; some will be transferred to other parties; some will be avoided.

What is the relevance of risk management?

Risk management is essential today more than ever. As globalization has increased, businesses face more complicated risks than they did several decades ago. Additional hazards constantly occur, many of which are connected to or caused by the now-ubiquitous usage of digital technology. Risk specialists have nicknamed climate change a "risk multiplier."

The coronavirus pandemic, which began as a supply chain concern for many firms, swiftly escalated into an existential hazard, damaging employees' health and safety, corporate operations, consumer interactions, and brand reputations.

In answer to the pandemic's fears, companies swiftly modified their approaches. They will, however, have to contend with new concerns in the future, such as how or if to return people to work and what should be done to make their supply networks less sensitive to crises.

Companies and board of directors are reconsidering their risk management methods as the globe grapples with COVID-19. They are reassessing their risk exposure and investigating risk management solutions. They are evaluating who should be involved in risk reduction.

Companies are now utilizing a reactive risk management strategy — guarding against past hazards and altering operations when a new risk causes harm — and are exploring the competitive advantages of a more proactive approach. Sustaining sustainability, robustness, and business agility are becoming increasingly popular. Companies are also studying how artificial intelligence and advanced governance, risk, and compliance (GRC) systems could enhance risk management. Happy New Year... I hope this be of help to someone

Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These risks stem from a variety of sources including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.

A successful risk management program helps an organization consider the full range of risks it faces. Risk management also examines the relationship between risks and the cascading impact they could have on an organization's strategic goals.

This holistic approach to managing risk is sometimes described as enterprise risk management because of its emphasis on anticipating and understanding risk across an organization. In addition to a focus on internal and external threats, enterprise risk management (ERM) emphasizes the importance of managing positive risk. Positive risks are opportunities that could increase business value or, conversely, damage an organization if not taken. Indeed, the aim of any risk management program is not to eliminate all risk but to preserve and add to enterprise value by making smart risk decisions.

"We don't manage risks so we can have no risk. We manage risks so we know which risks are worth taking, which ones will get us to our goal, which ones have enough of a payout to even take them," said Forrester Research senior analyst Alla Valente, a specialist in governance, risk and compliance.

Why is risk management important?

Risk management has perhaps never been more important than it is now. The risks modern organizations face have grown more complex, fueled by the rapid pace of globalization. New risks are constantly emerging, often related to and generated by the now-pervasive use of digital technology. Climate change has been dubbed a "threat multiplier" by risk experts.

A recent external risk that manifested itself as a supply chain issue at many companies -- the coronavirus pandemic -- quickly evolved into an existential threat, affecting the health and safety of their employees, the means of doing business, the ability to interact