In risk management, what does risk mitigation entail?

Risk mitigation refers specifically to the strategies and actions taken to reduce either the likelihood of a risk occurring or its potential impact on an organization. This involves identifying potential risks and implementing measures to lessen their severity, thereby protecting the organization from negative outcomes.

For example, if a company recognizes that a certain type of cyberattack could potentially jeopardize its data, it may invest in advanced security measures or improve its incident response plan. The goal is not to eliminate risk entirely but to manage and reduce it to a more acceptable level.

The other options reflect different approaches to handling risk. Avoiding all risks is often impractical and can lead to missed opportunities. Accepting all identified risks is typically not advisable, especially for risks that could have significant consequences. Transferring risks to a third party, while valid in certain contexts (such as outsourcing or insurance), does not constitute mitigation itself; rather, it is a different risk management strategy. Thus, taking steps to specifically reduce the impact or likelihood of risks aptly defines the concept of risk mitigation.