ABSTRACT
The term risk is often used to describe financial and business chance-taking. Within this broad meaning, the functions of risk management include the identification, analysis and control of risks, which have the potential to threaten the assets or well-being of an enterprise. While the primary objective of general management is to maximise profit, risk management focuses on minimising losses arising from unwanted and unforeseen lossmaking events. Such events can result in outcomes such as property damage, liability claims, bodily injury or other consequential losses. The degree to which a company is able to manage these risks will vary. For example, staff recruitment, training and succession planning can control the risk of loss of key employees in the future. Other risks are potentially manageable, such as risks associated with personal injury, business interruptions and property damage. Careful planning and monitoring processes, such as those described in Chapter 4, can help to avoid such events. Some risks, such as natural disasters and adverse economic conditions are unmanageable by individual companies, although their consequences can be managed through sound crisis management processes.
