Risk Management

Risk is the process in which internal and external environmental factors that are likely to occur in the future and that have the possibility of affecting the activities take place. Future events, our strategies, our goals
and the process should be managed by taking into account the possibility of it affecting the way we do business. Risk management is the process of making and implementing decisions that will minimize the negative effects of risk on an organization. Adverse effects of risk can be objective, measurable or subjective, such as insurance premiums and claims costs. It can also be difficult to measure in matters such as reputational damage or decreased productivity. If an enterprise controls risk by focusing and commits the resources needed to reduce it, it protects itself from uncertainty, reduces costs, and increases the likelihood of business continuity and success. Correct risk management is a prerequisite for businesses to succeed in the market. Businesses will face various risks in both managerial and financial issues in the future. Risk management differs from business to business, and can be done with different strategies in different units within a business. The stages are as follows;

.Planning: At this stage, it is decided how to approach risk activities and how to plan.

.Identifying Risks: It is determined from which activities the risks that may be encountered may arise and what these risks are.

.Qualitative Risk Analysis: Qualitative assessment of risks is made.

.Quantitative Risk Analysis: The probability of realization of these risks and their effects on business objectives are determined.

.Determining the Measures to be Taken Against Risks: While trying to increase opportunities by developing various methods against risks, threats are tried to be reduced.

.Monitoring and Control of Risks: Risks are monitored, risks are taken under control by implementing risk reduction plans. In addition, new risks are defined. The process continues in the same way for these risks.

Thanks to risk management, it is ensured that businesses take risks as much as they can bear. The undertaken risks are measured objectively and the managerial and financial difficulties that the company may encounter in the future are tried to be minimized.
The establishment of the application of the concept of corporate risk management and its use in companies does not go back long. Even in Turkey’s most important companies and holdings in this
We can say that the concept has come into play since the mid-2000s and the organizational structures related to it started to be formed in the 2010s. It has become an indispensable process that has been in our lives from the past to the present for a decade but has become an indispensable process that enters our lives even more with the meaning of technology and data. First of all, corporate risk management is a process. It is necessary to determine this because corporate risk management is not a one-off job. Process steps such as different people, departments, strategies and ways of doing business, that do not have a clear time schedule, that continues as the company or institution lives and continues to improve continuously.
is a subject concept. We can also use corporate risk management and internal audit in the same sentence. These two concepts are actually complementary to each other. Corporate risk management looks to the future, and internal audit looks to the past. Two of them stand in the same spot and your face on one side
To turn to the future, on the other hand, to the past. Both have analysis, control and audit functions. In internal audit, you evaluate and analyze historical data, and then, if there is a problem in the functioning of the company or the institution, you discuss the gaps and negativities together with the past burden. The situation is different in corporate risk management. Here you focus entirely on future events. In line with a company’s strategies and mission;

-Analyzes the internal or external environmental factors that are likely to damage, disrupt, and cause negativity to this strategy and mission in the future,
– Plans,
– It reveals prioritization by examining the effect and probability concepts of the phenomena you have planned and analyzed, and
-According to the prioritization, if each situation occurs, you plan the actions you need to take today.
Today, some organizations do not call it corporate risk management, but follow many precautionary policies for a healthier future on behalf of their companies. For example, the concept of family business constitutes 99% of companies in Turkey. One of the important demands that are frequently experienced in family businesses today; family business constitution service. When you look at it, this is the expression of the risk management mechanism that includes a family and an institution. The purpose of drafting a family constitution is to anticipate the problems that may be experienced among the current family members and to seek solutions to them. Later individuals,
It defines the process by signing and putting it in writing to manage future risks. In this way, they plan the actions to be taken in possible negative situations from today. Therefore, when you look at it, family business constitution consultancy, which is a service that most people take without realizing it, is a sub-service of corporate risk management. Based on this example, corporate risk management is a management methodology designed to prevent future negativities.

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