9.4.1 What is Risk and Risk Management?

Every business brings risks. That is why risk management is an important process for every company. It helps avoid predictable risks, protects from bad investment decisions and reduces losses and damages from unpredictable events.

Enterprise risk management (ERM) is the process of planning, organizing, and controlling the activities of an organization in order to minimize the effects of risk. It includes not just risks associated with accidental losses, but also financial, strategic, operational and other related types of risks.