Risk most commonly refers to the prospect of loss. All businesses face a wide variety of risks, some risks arise from events and circumstances beyond the control of management and many arise from management failures.
It is an increasingly common practice for businesses to develop a risk and security register in order to understand the potential risks the business may be exposed to, and to develop contingency measures to deal with the risk event when they occur.
The 6 functions of Risk Management are to identify, analyze, plan, track, control and communicate and can help to mitigate risks in a pro-active S.M.A.R.T. ( Specific , Measurable , Attainable, Relevant and Timely ) manner.
There are five good reasons for having a mitigation plan:
1. The duty of care requirement in management
2. The need for asset and brand protection
3. The power of the consumer and user generated content sites
4. The trend towards more litigation
5. The old rule that ” planning prevents poor performance ”