Risk Management Overview February 21, 2011 FIN/415

Risk Management Overview Paper Risk management is a systematic process of managing the exposure of the organization to a variety of risks. This process has become increasingly important for the success of any organization in current competitive markets. The successful identification of threats and opportunities is crucial in risk management as it allows to create the processes and procedures allowing the company to maximize opportunities and minimize threats. Many organizations treat risk management seriously and create separate department responsible solely for risk management. Royal Caribbean Cruise Line incorporated risk management department into its structure. This step allowed this organization to improve the risk assessment procedures and introduce the necessary processes to minimize the impact of threats. The organizational risk relates to the organizational governance, operations, and information systems. The organizational risk management “provides assurance for reliable and accurate financial and operational information and reporting, effectiveness and efficiency of operations, and safeguarding of assets, as well as compliance with regulations, contracts, and the organization’s code of ethics” (Aghili, 2010, p. 23). Organizational risk management treats the relates to the organization as one entity and risk management is relevant to all business areas and processes. In Royal Caribbean the Internal Audit plays an important role in the identification of risk. The Internal Audit assesses the risk of fraud, security breach, workforce issues and safety, which shows that the company approaches risk from the organization standpoint. Business risk relates to the business value of