Risk management is a continuous, proactive and systematic process to understand, manage and communicate risk from an organization-wide perspective.
The current operating environment demands a more integrated risk management approach.
Today, organizations are faced with many different types of risk (e.g., policy, program, operational, project, financial, human resources, technological, health, safety, political).
Risks that present themselves on a number of fronts as well as high level, high -impact risks demand a coordinated, systematic corporate response.
It requires an ongoing assessment of potential risks for an organization at every level and then aggregating the results at the corporate level to facilitate priority setting and improved decision-making.
risk management does not focus only on the minimization or mitigation of risks, but also supports activities that foster innovation, so that the greatest returns can be achieved with acceptable results, costs and risks.
From a decision-making perspective, risk management typically involves the establishment of hierarchical limit systems and risk management committeesto help to determine the setting and allocation of limits.