ERM: LESSON 1

A systematic process of identifying, assessing and responding to risks in order to minimize their potential negative impacts and optimize opportunities for achieving organizational objectives.

This step involves identifying and documenting potential risks that could affect the organisation's objectives.

Once risk are identified, they need to be assessed in terms of their likelihood of occurrence and the potential impact they could have on the organization.

After assessing risks, organizations develop and implement strategies to respond to them.

Completely eliminating the risk by not engaging in the activity that creates it.

Minimizing the likelihood or impact of a risk

Shifting the financial burden or consequences of a risk to a third party.

Acknowledging the risk and choosing to bear the potential consequences

The objective of safeguarding organizational assets, including physical, financial and intangible assets from potential threats or vulnerabilities that could result in loss or damage.

Goal of providing decision-maker with reliable and timely information regarding risk, opportunity, and potential outcomes to support informed and effective decision-making process.