Risk management enables a company to evaluate the opportunities and risks so that it can meet the objectives set, even if daily occurrences do not match expectations. Here’s an explanation.
Not everything in life goes to plan. It's the same for companies: an important member of staff resigns in the middle of a strategically important project. A machine breaks down in the middle of the manufacturing process. An important supplier goes bankrupt. A long-time customer switches to your competitor.
In principle, risk management involves continuously analyzing and evaluating events, actions and developments that could stop the company from reaching its objectives and fully implementing its strategy.
There is a distinction primarily between corporate risk management and operational risk management. Corporate risk management is the difference between the company’s strategy and operational risk management.