What is the primary goal of risk management?

The primary goal of risk management is to identify and mitigate various types of risk. This encompasses understanding potential threats to a business, whether they stem from financial uncertainties, legal liabilities, strategic management errors, accidents, or natural disasters. By systematically analyzing risks, a business can develop strategies to reduce or eliminate the likelihood of an adverse event occurring, as well as lessen its impact if such an event does happen. Effective risk management leads to improved decision-making, enhanced operational efficiency, and the ability to seize opportunities while minimizing potential downsides.

While the other choices may play a role in a business's broader objectives, they do not align as closely with the core aim of risk management. Promoting aggressive business strategies could lead to increased exposure to risks if not managed properly. Increasing company profits is often a consequence of effective risk management rather than its primary goal. Ensuring compliance with regulations is certainly important but is typically a subset of a larger risk management strategy focused on both legal and operational risks.