THE RISK MANAGEMENT PROCESS IN CORPORATE GUVERNANCE

Adrian Caraiman ()
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Adrian Caraiman: Accounting and audit Department, Faculty of Economics and Business Administration, The West University of Timisoara,Timisoara, Romania

Annals of Faculty of Economics, 2020, vol. 1, issue 1, 189-198

Abstract: In this paper I want to present the place and role of risk management within an organization in corporate governance. Thus, the risk management of an organization consists of defining the risk, identifying and evaluating the impact and probability of materialization and, subsequently, establishing appropriate ways to manage the significant risks. According to some authors, the risk management of an organization is among the newcomers in the context of the concept of corporate governance, which brings a holistic perspective, as an integrating factor of the parts of a whole, which is the organization. At the same time, it can be emphasized that, according to the standards regarding strategic risk management, risk management should become an integrated part of the way any organization works; and in other ideas, being the basis of management approaches, it should not be separated from the daily activities of any organization. In corporate governance, in any entity, risk management is necessary because both in the company and in the environment in which it operates, there are uncertainties about the nature of the threats in achieving the objectives, or the nature of the opportunities. Any manager must pose the problem of managing the threats, because, otherwise, not reaching their objectives, they would be disqualified, or to take advantage of the opportunities for the benefit of the organization, proving their efficiency. If uncertainty is an everyday reality, then the reaction to uncertainty must become a permanent concern.

Keywords: risk; risk management; corporate governance; organization; uncertainties (search for similar items in EconPapers)
JEL-codes: G30 M40 M41 M42 (search for similar items in EconPapers)
Date: 2020
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