Risk management

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Risk management

The process of identifying and evaluating risks and selecting and managing techniques to adapt to risk exposures.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Risk Management

The process of identifying risks to an investment and, if possible, mitigating them. The first stage of risk management is determining the types and magnitudes of risk. For example, a risk manager might look at a bond and identify the possibility of default as a risk and evaluate the likelihood of that scenario. The second stage is taking steps to remedy risk, insofar as it is possible. In the above example, the risk manager might recommend buying other bonds to offset the risk of default on any single bond. Sometimes risk cannot be mitigated; in that case, risk managers evaluate how central the investment is to one's investment goals and risk tolerance. Generally speaking, investors seek the highest possible return at the lowest possible risk. Risk management helps them achieve this goal by showing how their investments may be affected and finding ways to alleviate the situation.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Risk management.

Risk management is a set of strategies for analyzing potential risks and instituting policies and procedures to deal with them. The work of assessing the possibilities, setting priorities, and finding cost-effective solutions is also described as business continuity planning.

In a business environment, some risks, such as economic pressures or technology meltdowns, are universal while others are unique to a particular venture or physical location.

Large companies may use a combination of strategies to manage risk, including buying insurance, creating redundant systems, diversifying physical locations or core businesses, and establishing other hedges.

For an individual investor, risk can be managed in several ways: insuring at least a portion of your portfolio, allocating your assets across classes, diversifying your holdings, and hedging with derivative products.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

risk management

A systematic approach to identifying insurable and noninsurable risks, evaluating the risk of loss versus the cost of insurance, and minimizing the possibility of loss through well-planned and regularly followed systems and procedures. Especially in construction, which typically has the very highest premiums for workers' compensation insurance, well-planned and well-executed risk management programs can result in significant savings on premiums.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Another issue that has been raised is that risk communication should be an ongoing activity that deepens mutual relationships of trust among stakeholders, rather than a temporary activity.
The two-day workshop also aims to review the principles, technologies and tools of risk communication, as well as contributing in planning with several sectors to improve and practice the risk communication and community participation to tackle the spread of diseases.
The two-day workshop also aims to overview the principles, technologies and tools of risk communication, as well as contributing in planning with several sectors to improve and practice the risk communication and community participation to tackle the spread of diseases.
As mentioned previously, risk is both objective and relational, therefore the receiver of risk communication is a critical factor to consider.
Previous researchers in risk communication have investigated the effects of individual differences on risk perception, such as demographics (Savage, 1993), expertise (H.
Such human perceptions present considerable challenges to the design of an effective risk communication strategy in overcoming public apathy towards radon.
Risk communication: A handbook for communicating environmental, safety and health risks.
Effective risk communication depends on acknowledging the many factors that contribute to individual risk perception and aims to help people combine instinct with evidence to make the healthiest choices possible.
In this study, we acknowledge the need to learn lessons for improving risk communication from problems encountered by experts prior to and after the L'Aquila event.
Doctors, including psychiatrists, are an essential part of that risk communication. Thus the information on Ebola and HIV is critical for psychiatrists to know, so that we can be a soothing voice to treat the anxiety of the public.
But communication about risk still seems to be lacking between directors and executives, according to the Oliver Wyman report "Risk Communication: Aligning the Board and C-Suite." Public company executives said that 30% of their time is spent on risk issues, but their biggest challenge is an unclear under standing of the "goals of risk management process and structure," the study found.
Essential elements for pre-travel consultation are risk assessment, risk communication and risk management.

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