|
Risk Management is the process of carrying out decisions that will
minimize the adverse effects of accidental losses upon your organization.
As a decision making process, the following sequence is generally
followed:
- Identifying exposures to accidental loss may interfere with
an organization's basic objectives.
- Examining feasible alternative Risk Management techniques for
dealing with these exposures.
- Selecting the best Risk Management technique(s).
- Implementing the chosen Risk Management technique(s).
- Monitoring the results of the chosen technique(s) to assure
the Risk Management Program remains effective.
A Risk Management Program that establishes a system for planning,
leading and controlling the resources and activities of an organization
in order to fulfill its objectives cost effectively is necessary
for organizations of all sizes. A structural logical program appropriate
for that particular organization is the foundation on which the
entire Risk Management effort rests.
In most organizations, the Risk Management Program typically begins
and ends with the purchase of insurance. This may be one of the
responsibilities of the controller, business manager or a corporate
officer. A full-time risk manager or even the delegation of Risk Management
responsibilities cannot be justified. Consequently, the Risk Management
process is not followed due to the lack of time or understanding.
|
