Risk management is the systematic process of identifying, assessing and managing risks that could potentially have a negative impact on an organisation. The aim is to identify risks at an early stage and take appropriate action to minimise them.
Risk management protects organisations from unexpected threats and losses, ensures business continuity, improves decision making and ensures compliance with legal and regulatory requirements.
Risk management considers various types of risk, including financial, operational, legal and regulatory, and technological risks such as cyber-attacks.
Effective risk management is achieved through the identification of potential risks, the assessment of their likelihood and impact, the implementation of risk management measures and the ongoing monitoring of risks.
Companies should implement risk management when they are preparing new projects or investments, when they are subject to legal and regulatory requirements, or when they are exposed to potential threats such as cyber-attacks or market changes.