Are all risks bad?

Are all risks bad? Why is it important to recognize both sides of the risk management coin – the top and downside?

It is a common idea that all risks are bad. In risk management point of view, risk is defined as effect of uncertainty on objectives. This definition talks about effects and not only negative effects or bad effects.

We can have various types of effects i.e. bad and good effects. There are risks that cause delay in different processes, fines and penalties, reputation damage e.t.c, but there other types of uncertainties if can happen could be good to the Company or business. For example exchange rates can change in a way that brings benefit to the Company.

It is very important to manage both types of uncertainties through risk management process where more focus is imposed on reducing bad side of risks and make good things happen.

In doing so, opportunities can be linked to risk because there is a relationship between risks and opportunities. 

Source: RiskDoctorVideo