Finance is concerned with money management and acquiring funds. Financial risk arises
from uncertainty about financial returns. It includes market risk, credit risk, liquidity risk and
operational risk. In finance, risk is the possibility that the actual return on an investment will
be different from its expected return. This includes not only “downside risk” (returns below
expectations, including the possibility of losing some or all of the original investment) but also
“upside risk” (returns that exceed expectations). In Knight’s definition, risk is often defined as
quantifiable uncertainty about gains and losses. This contrasts with Knightian uncertainty, which
cannot be quantified. (資料來源)
In general, the aim of risk management is to assist organizations in “setting strategy,
achieving objectives and making informed decisions”. The outcomes should be “scientifically sound,
cost-effective, integrated actions that [treat] risks while taking into account social, cultural,
ethical, political, and legal considerations”. In contexts where risks are always harmful, risk
management aims to “reduce or prevent risks”. In the safety field it aims “to protect employees, the
general public, the environment, and company assets, while avoiding business interruptions”.
For organizations whose definition of risk includes “upside” as well as “downside” risks, risk
management is “as much about identifying opportunities as avoiding or mitigating losses”. It then
involves “getting the right balance between innovation and change on the one hand, and avoidance of
shocks and crises on the other”. (資料來源 )