Risk management encompasses the process of identifying, analyzing and responding to distinctive risk factors that form part of the life of a business. Competent risk management puts emphasis on trying to control the future outcomes of a company as much as possible by acting proactively rather than reactively. Individuals like Michael Saltzstein particularly specialize in this domain. In many ways, competent risk management has the potential to reduce the possibility of a risk-taking place and its potential impact. Risk management includes examining the relationships between the varying risks faced by a company and the cascading impact they might have on its strategic goals.
The holistic approach towards risk management is at times referred to as enterprise risk management. This process puts emphasis on anticipating and understanding risks across any organization. Apart from focusing on both internal and external threats, enterprise risk management also puts focus on the importance of managing positive risks. Positive risks are opportunities that might increase business value. Moreover, if not taken, these risks can also cause losses to a company. The aim of a risk management program generally is not to eliminate all risk but to preserve and add to enterprise value by choosing to make smart risk decisions.
People do not manage risks so that they end up with no risks. Rather, risk management is needed to understand which risks are worth taking, which ones would take people to their goal, and which are the ones that have enough of a payout to even take them. As a result, a risk management program must be effectively intertwined with organizational strategy. For the purpose of linking them, risk management leaders firstly need to define the risk appetite of a company, which basically refers to the amount of risk it is willing to accept to realize its objectives.
Risk management structures are generally tailored to do way more than just identifying risks. Industry professionals like Michael Saltzstein have a keen knowledge about this sphere. They are able to calculate uncertainties involved in a company proactively, and subsequently predict their influence in a business. As a result, the choice ultimately comes to accepting risks or rejecting them. Rejection or acceptance of risks majorly depends on the tolerance levels that a business has already defined for itself.
In case a company sets up risk management as a continuous and disciplined process with the aim of identifying and resolving risks, then discerning risk management structures might end up getting used for the purpose of supporting other risk mitigating systems. companies face downfalls and dangers. Each and every internal choice comes with the potential of making the wrong choice. Strategic risks additionally are not only based on subjective decisions, which complicate the things even more. Many of them are even caused externally due to of market demand and the environment in which products get released.
This includes cost control, planning, budgeting, and organization. In this situation, as the focus is on proactive risk management, a company is unlikely to witness much surprises. As the visionary leader of global risk services and financial structures, Michael Saltzstein is successful in delivering multimillion-dollar expense reductions and bottom-line improvement. In the past, he has optimized award-winning risk programs as well. His industry experience makes him a great candidate to talk about this topic.