Risk Identification: Identifying and understanding potential risks that may impact the organization’s objectives and operations. This involves analyzing internal and external factors that could lead to potential risks.
Risk Assessment: Evaluating the identified risks by assessing their likelihood of occurrence and potential impact on the organization. This step helps prioritize risks based on their severity and likelihood.
Risk Mitigation: Developing and implementing strategies to reduce or eliminate risks. This could involve taking preventive measures, implementing control mechanisms, transferring risks through insurance, or avoiding certain activities or situations altogether.
Monitoring and Review: Continuously monitoring the effectiveness of risk management strategies, reassessing risks periodically, and adapting the risk management framework as needed to address new or emerging risks.
Effective risk management requires a systematic approach, involvement of key stakeholders, and a culture of risk-awareness within the organization. It helps organizations make informed decisions, protect their assets, enhance resilience, and improve overall performance.