Everyone Needs Risk Management

 

What is risk? Some say risk is a nasty four letter word that can ruin your life. Risk management is serious business.
As an industry, it includes over 30,000 companies.

The Steps in Managing Risk

Here is a four-step process you can follow to manage your risk.

1) Assess

2) Categorize

3) Consider

4) Implement

Risk management is not only for companies, but for individuals as well. Did you know there are more than 18 different risks you can face as an investor?

Risk management should:

  • create value – resources expended to mitigate risk should be less than the consequence of inaction
  • be an integral part of organizational processes
  • be part of decision making process
  • explicitly address uncertainty and assumptions
  • be a systematic and structured process
  • be based on the best available information
  • be tailorable
  • be transparent and inclusive
  • be dynamic and responsive to change
  • be capable of continual improvement and enhancement
  • be continually or periodically re-assessed

Article source: Forbes