Jaian Cuttari-What is risk management and why is it important

1. Jaian Cuttari-What is risk management and why is it important? An organization's capital and earnings are at risk when risks are identified, assessed, and controlled. According to Jaian Cuttari, these risks may be a result of financial uncertainties, legal liabilities, technological issues, strategic management errors, accidents, or natural disasters. Having an effective risk management program helps an organization consider all the risks it faces. Furthermore, risk management examines the cascading effects that risks can have on the strategic goals of an organization. Why is risk management critical? Perhaps there has never been a time when risk management was more important than now. The rapid pace of globalization has led to a heightened complexity of risks for modern organizations. The now-pervasive use of digital technology is continuously creating new risks that are often related to it. The global warming crisis has been called a "threat multiplier" by risk experts. Despite beginning as a supply chain issue, a recent external risk -- the Coronavirus pandemic -- quickly morphed into an existential threat, affecting employees' health and safety, the ability to conduct business, and their reputation among consumers. As a result of the pandemic, businesses made rapid adjustments. However, as they move ahead they will be faced with new risks, which include whether or not to bring employees back to the office and how their supply chains can be made more resilient to crises. Traditional risk management vs. enterprise risk management Enterprise risk management tends to get a bad rap today compared to traditional risk management. The two approaches aim to reduce the chance of harming an organization. They both buy insurance to cover a range of risks, from losses caused by fire and theft to cyber liability. Their policies follow the recommendations of major standards bodies. Jaian Cuttari believes traditional risk management lacks the mindset and mechanisms needed to understand risk as an integral part of enterprise strategy and performance.