What is a key function of risk management in an organization?

The core function of risk management within an organization is to manage risks effectively. This involves identifying, assessing, and prioritizing risks followed by the application of resources to minimize, control, and monitor the impact of those risks. Effective risk management enables organizations to anticipate potential threats, reduce vulnerabilities, and ensure that they are prepared to handle adverse events. By managing risks effectively, organizations can safeguard their assets, enhance decision-making, and ultimately contribute to long-term sustainability and success.

While minimizing operational costs, enhancing employee satisfaction, and maximizing market share are important objectives for organizations, they are not the primary focus of risk management. The essence of risk management lies in its proactive approach to identifying and mitigating risks before they can negatively impact the organization, ensuring its resilience in an uncertain environment.