The Best Strategy for Risk Management

B.

The best strategy for risk management is to reduce risk to an acceptable level, as this will take into account the organization's appetite for risk and the fact that it would not be practical to eliminate all risk.

Achieving balance between risk and organizational goals is not always practical.

Policy development must consider organizational risks as well as business objectives.

It may be prudent to ensure that management understands and accepts risks that it is not willing to mitigate, but that is a practice and is not sufficient to l>e considered a strategy.

The best strategy for risk management is to reduce risk to an acceptable level, which is option B.

Risk management is the process of identifying, assessing, and prioritizing risks, followed by the implementation of strategies to minimize or mitigate those risks. The primary objective of risk management is to reduce risk to an acceptable level, rather than eliminating it entirely, as complete elimination is often impractical and costly.

Reducing risk to an acceptable level involves balancing the cost of implementing risk mitigation measures against the potential impact of the risk. In other words, risk management should strive to achieve a balance between the level of risk and the organization's goals and objectives. This approach ensures that resources are used efficiently and effectively, and that the organization's risk profile is aligned with its overall strategy.

While policy development and consideration of organizational risks are important components of risk management, they are not the best strategy for managing risk. Ensuring that all unmitigated risks are accepted by management is not a recommended approach either, as it may expose the organization to unacceptable levels of risk.

In conclusion, the best strategy for risk management is to reduce risk to an acceptable level by implementing a risk-based approach that balances risk with organizational goals and objectives.