Benefits of Risk Management
A risk is any event or action that can keep an organization from achieving its objectives.
Benefits of Risk Management
Risk management is an essential activity for every organization. Although proper risk management cannot completely eliminate the chance of a negative event, it can reduce the probability of negative events and furthermore it can help reduce the amount of loss resulting from a negative event.
Different organizations and industries will experience different benefits from effective risk management. However, some of the common benefits include:
- Increasing shareholder value through minimizing losses and maximizing opportunities.
- Fewer disruptions to operations.
- Better utilization of resources.
- Fewer shocks and unwelcome surprises.
- Employees, other stakeholders, and relevant governing and regulatory bodies are more confident in the organization.
- More effective strategic planning.
- Better cost control.
- Timelier assessment of and grasp of new opportunities.
- Better and more complete contingency planning.
- Improved ability to meet objectives and take advantage of opportunities.