What is the primary focus of risk management?

The primary focus of risk management is to evaluate a situation to assess the potential hazards. This process involves identifying, analyzing, and prioritizing risks that could affect an organization’s ability to achieve its objectives. By understanding these potential hazards, organizations can implement strategies and controls to mitigate them, thereby minimizing the impact of unforeseen events.

This approach is foundational because it allows organizations to prepare for and respond appropriately to risks, ensuring safety and stability in operations. While other areas, such as financial opportunities or supply chain management, are important in their own contexts, they do not encompass the broad scope and critical nature of assessing and managing risks in various environments.