What is the role of Risk Management?

The role of Risk Management is fundamentally about identifying, assessing, and addressing potential risks within an organization to ensure that they remain within acceptable limits. This is most effectively encapsulated by the option that emphasizes reducing or controlling risks to levels that the organization can adequately manage.

In practice, organizations are rarely able to eliminate all risks; instead, they focus on minimizing the impact or likelihood of negative outcomes. Effective risk management involves implementing strategies, policies, and practices that allow an organization to balance potential threats against its objectives and to undertake activities while taking informed risks.

The other options do not capture the essence of effective risk management. Eliminating all risks completely is impractical and often impossible, as some degree of risk is inherent in most activities. Monitoring financial growth exclusively overlooks the broader spectrum of risks that an organization may face. Lastly, creating more vulnerabilities for testing contradicts the foundational goal of risk management, which aims to protect and fortify systems and assets rather than create new risks.