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Risks are an immanent part of every organisation. Risks, defined in ISO 31000 as the effect of uncertainty on objectives, are opportunities to pursue or threats to avoid, or at least to reduce or transfer. Risk management is the process of tackling risks in a structured, effective way. First, you have to define a risk policy. Based on this policy, you install a risk management process consisting of:
- risk assessment
- risk treatment
- monitoring and reviewing risks
- communication and consultation
This is a dynamic process which must fit into a decision making processes. Since risks are by definition uncertain, a risk management process needs to involve the people with experience and knowledge.
Effective risk management means to master threats in a predictive way and to explore opportunities.