Risk management is the process of identifying, assessing, and prioritizing risks followed by the coordinated application of resources to minimize, monitor, and control the probability or impact of unforeseen events. It involves a systematic approach to understanding potential threats to an organization’s assets, including financial, operational, and reputational aspects.
The ultimate goal of risk management is to ensure that uncertainty does not hinder the achievement of objectives and that the organization can sustain its operations effectively. This process often includes techniques such as risk avoidance, risk reduction, risk sharing, and risk acceptance.
By evaluating both the likelihood of risks and their potential consequences, organizations can make informed decisions about how to address risks. Risk management is essential across various sectors, including finance, healthcare, project management, and more, as it enables entities to safeguard their resources and maintain stability in the face of uncertainty.