Risk management is the process of identifying, assessing and controlling risks that may arise from different sources, such as financial, operational, strategic and regulatory risks. It involves the development and implementation of strategies, policies and procedures to mitigate or avoid potential losses or adverse outcomes that may negatively impact an organization.
The primary objective of risk management is to reduce uncertainty and protect assets from potential harm. The process includes several steps, including:
- Risk Identification: This involves identifying potential risks that could affect an organization, such as financial risks, operational risks, strategic risks or reputational risks.
- Risk Assessment: Analyzing and evaluating the likelihood and impact of identified risks. The assessment considers the potential consequences of each risk and the likelihood of occurrence.
- Risk Mitigation: Developing and implementing strategies and controls to manage or reduce the risk identified. This involves risk avoidance, risk transfer or risk reduction strategies.
- Risk Monitoring: Ongoing monitoring and reviewing of risks to ensure that the risk management strategies and controls remain effective and relevant over time.
Effective risk management helps your organization be better prepared for potential risks, minimize potential losses and protect assets. Contact Spherica today at 801-446-2345 to learn what we can do to help protect you.