What does a company aim to achieve by implementing effective risk management?

A company aims to achieve the improvement of overall organizational resilience by implementing effective risk management. This involves identifying, assessing, and prioritizing risks in a manner that enhances the organization's ability to respond to adverse events and challenges. By fostering a culture of proactive risk management, companies can better anticipate potential disruptions, thereby enabling them to adapt quickly, maintain operational continuity, and protect their assets and reputation.

Improving organizational resilience means being better prepared for uncertainties in both the internal and external environments. It goes beyond merely avoiding risks to ensuring that the organization can thrive despite them. This holistic approach strengthens the organization’s capacity to innovate, survive crises, and sustain long-term success.

The other choices do not align with the primary goals of effective risk management principles. For instance, complete elimination of risks is impractical since some level of risk is inherent in any business operation. Focusing only on short-term gains overlooks the necessity of sustainable practices and strategic planning. Lastly, reducing communication with stakeholders undermines transparency and trust, which are critical for managing risks effectively.