Risk Management = The process whereby organisations methodically address the risks associated with their activities with the goal of achieving sustained benefit.
Identifying and quantifying vulnerability allows an organisation to prioritize resources to meet the most severe risks and to set defined thresholds at which action on an issue will be triggered.
Risk Management strategies are often classified as the four T’s:
- Tolerate – Accept the risk.
- Transfer – Spread or share the risk by taking our insurance cover, dual / multi-sourcing, use contract terms to ensure the costs of risks are borne by the supplier, or liquidated damages clauses.
- Terminate – If the risk is too great, cannot be reduced or is too costly to be justifiable.
- Treat – Taking active steps to mitigate, prevent, minimise or reduce the probability and impact of the risk occurring.
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