What is risk management?
There are several definitions for risk. The Institute of Risk
Management, for one, defines risk as the combination of the
probability of an event and its consequence. Ultimately, every
organisation would choose the definition which fits their business
best.
More often than not, risk management is used to signify negative
consequences, however, it is important to keep in mind that taking
a risk can also result in a positive outcome. This being said, the
three most common risk events relate to opportunity, hazard and
uncertainty.
It goes without saying that risk can never truly be eliminated
– a risk materialising (whether minor or detrimental) is
always a possibility and this is why risk management is so
important. Risk management is essentially the pre-emptive
measure of identifying potential risks, analysing their likelihood
and impact (consequences) and taking all possible steps to reduce
the chances of such risk materialising and thus
