What is the main aim of risk management?

The main aim of risk management is to ensure that risks are understood and effectively handled. This involves identifying potential risks, assessing their impact, and implementing measures to mitigate, transfer, or accept those risks as appropriate. Rather than eliminating all risks, which is often impossible and impractical, effective risk management focuses on making informed decisions about risk acceptance and control. It enables organizations to prepare for uncertainties and enhances their ability to achieve objectives while maximizing opportunities that risks might present.

In the context of risk management, understanding risks involves continuous monitoring and review processes to adapt to changing scenarios. This approach allows organizations to be proactive rather than reactive, leading to smarter strategic planning and resource allocation. Thus, by focusing on understanding and handling risks effectively, organizations can better safeguard their resources while pursuing their goals.