Having an effective risk management strategy is crucial because it empowers you with the tools you need to identify and manage potential risks. You can only mitigate the risks you can identify.
Generally speaking, there are five main steps you need to integrate into your business in order to effectively manage risk and control potential threats to an organization’s capital and earnings.
Workiva outlines these five risk mitigation strategies as follows:
- Define business strategy and objectives. Business strategies must integrate risk management frameworks into the planning stage.
- Establish KPIs. Key Performance Indicators should be specific enough to see where improvement is needed and how risks can be measured.