NERC defines risk as:
"The threat that an event or action will adversely affect NERC's ability to achieve its business objectives and execute its strategies"
and risk management as:
"The systematic, positive identification and treatment of risk which either threatens the organisation in any way or causes beneficial opportunities to be missed"
The Chief Executive and NERC Executive Board are keen to promote that risks must be managed rather than avoided altogether and that reasonable risk taking is considered to be an acceptable practice.
The need to take risks is inherently driven by the need to meet objectives. Risk Management enables us to:
- prioritise - dealing with the most important tasks first
- recognise factors that could delay, reduce or even stop the achievement of our objectives
- evaluate different ways of meeting the objective, balancing the possibility of a better result against increased cost (either money or time)
All central government organisations are required to fully embed risk management into their cultures with a view to both reducing unnecessary loss and maximising opportunity. A Statement to this effect is now a required part of the Annual Report & Accounts.