Risk management is quite common in today’s business environment. In fact, most businesses utilize risk-management processes and strategies. Nevertheless, risk-management critics have voiced a number of concerns about it over the years. First of all, these individuals claim that it is often difficult to determine who within a company is responsible for risk-management efforts, and as a result, many risks are overlooked. Also, because risk is constantly in flux, critics complain that any risk-management plan that a business might create is potentially out of date as soon as it is developed. These individuals also point out that risk management seems to focus on what could go wrong in every situation, rather than concentrating on how to make things go right. Finally, risk management costs money that these critics believe could be better spent elsewhere on more profitable activities.

Proponents of risk management, however, work hard to dispel these criticisms and misbeliefs. As an example, risk-management supporters explain that many larger businesses have a chief risk officer (CRO) and risk-management staff, although everyone is ultimately responsible for managing risks. Production employees, for example, may be required to wear certain personal protective equipment (e.g., safety goggles, boots, gloves, hard hats, etc.) to protect themselves from workplace injury. And, a credit manager might determine that it is too risky to extend credit to a customer who has several delinquent accounts with other businesses.

Secondly, these individuals point out that risk management involves monitoring risks and revising risk-management strategies on a continuous basis, rather than just once. Also, they explain that risk management helps to create a risk-aware culture, not a risk-averse one. Lastly, these supporters propose that risk management is well worth the money because it helps to better align strategy and performance—maximizing profits and minimizing losses.