To understand risk management, one needs to understand the terms; risk and management. Risk is any event that is uncertain whose occurrence has potential to cause a loss or a gain to the business. Traditionally we have confused the word risk to mean causing a loss in which case many organizations have failed to plan and prepare how to handle an opportunity which arises when it has not been expected. But because business is more concerned with the threat of failing than the threat of abrupt success, we concern ourselves more with risk management in the context of managing bad…

The Board has overall responsibility for running the business from the strategic point of view. They are responsible for oversight and risk management. The oversight role ensures long term business success and sustainability. They help ensure that the business or organization has a ‘strategic foundation’ upon which long term viability of the business is anchored. It is like having a strong foundation for the house. The stronger the foundation, the longer the house will stand. Risk management role helps ensure going concern events or incidents with potential to fail the business are proactively anticipated, identified and effective mitigation measures implemented.…