What is the primary goal of risk assessment?

The primary goal of risk assessment is to identify potential risks and develop strategies to manage them. This process involves systematically analyzing various factors that could negatively impact an organization, including operational, financial, compliance, and reputational risks. By identifying these risks, organizations can prioritize them based on their likelihood and the potential impact they may have, allowing for the creation of effective risk management strategies and controls.

Furthermore, the aim is not to eliminate all risks entirely, as this is often impractical or impossible. Some risks are inherent and may be accepted as part of doing business. Instead, the focus is on understanding and managing risks to minimize their negative effects while capturing opportunities that may arise from them. This proactive approach enables organizations to respond effectively to potential threats and enhances their overall resilience.

In contrast, increasing the number of risks taken or merely documenting past incidents does not contribute to effective risk management. Instead, these practices might lead to increased vulnerabilities or a lack of preparedness for future challenges. Therefore, the emphasis remains primarily on identifying, analyzing, and managing risks to support the organization's strategic objectives and sustainability.