ENTERPRISE RISK MANAGEMENT

Risk management means being knowledgeable about potential risk and acting accordingly. Until recently, the whole process of risk management only meant buying insurance cover.

There are some significant advantages to be gained by performing enterprise risk management. Firms with robust and systematic risk management can gain competitive advantage over those that manage and monitor risks individually and inconsistently.

RISK MANAGEMENT OPTIONS

• knowingly tolerate by accepting the level of risk
• control and constrain the risk to an acceptable level
• transfer unwanted risk to a third party
• avoid risk by terminating the activity giving rise to risk

TRANSFERRING RISK

A company’s appetite for risk and its ability to withstand risk is relevant information. Robust and well-executed enterprise risk management is a good predictor of an organisation’s competitiveness and long term success.