What is the primary purpose of anticipating and managing risk in ORM principles?

The primary purpose of anticipating and managing risk within the framework of Operational Risk Management (ORM) principles is to enable individuals and organizations to make informed risk decisions and implement effective controls. This approach acknowledges that while it may not be possible to completely eliminate all risks, understanding potential hazards allows for the identification of strategies to mitigate them.

By prioritizing informed decision-making, ORM encourages a proactive stance on risk management. This includes assessing various risks, determining their potential impact, and taking preemptive actions to manage them effectively. Implementing effective controls is essential to minimize the likelihood of undesirable outcomes and to ensure that operations can proceed safely and efficiently.

The focus is on creating a systematic process for evaluating risks and enhancing safety, rather than allowing risks to go unmanaged or solely delegating them to others without proper oversight or authority. In this way, ORM fosters a culture of accountability and vigilance, emphasizing that careful planning and risk assessment are central to operational success.