What is the primary principle of Operational Risk Management regarding risks?

The primary principle of Operational Risk Management emphasizes the importance of accepting no unnecessary risk. This principle is grounded in the understanding that while risk is inherent in all operations, not all risks provide a corresponding benefit to warrant their acceptance. By focusing on avoiding unnecessary risks, organizations can protect their resources, maintain operational efficiency, and enhance safety.

This approach encourages thorough risk assessment and decision-making processes, allowing for risks to be managed effectively rather than entirely eliminated or ignored. It fosters a culture of risk awareness where teams are trained to identify, analyze, and mitigate risks in a measured manner.

In contrast, accepting all risks without discernment, addressing only critical risks, or seeking to eliminate all risks can lead to either reckless behavior or an impractical approach to risk management that may hinder operational effectiveness. The focus on avoiding unnecessary risks aligns with a strategic approach to risk management that balances opportunity and responsibility.