Which of the following is true about accepting risk in ORM?

Accepting risk in Operational Risk Management (ORM) is a fundamental concept, particularly when the potential benefits of an action or decision clearly justify the inherent risks involved. When we say that risk can be accepted when benefits outweigh the costs, we acknowledge the practical realities of decision-making in various fields, including business and operational contexts. This approach allows for a balanced consideration of potential outcomes, where weighing the positives against the negatives is crucial for effective risk management.

In many scenarios, avoiding all risks is not feasible or beneficial; this is especially true in environments that require innovation, investment, or competitive advantage. Recognizing that some risks may lead to significant rewards encourages smarter risk-taking rather than an overly cautious stance that could hinder progress or growth.

For example, a company launching a new product may face various risks (financial, market, operational), but if the projected benefits (increased sales, market share, customer loyalty) significantly outweigh these risks, it may be a calculated decision to proceed. This approach aligns with the broader principles of risk management, which aims to identify, assess, and prioritize risks before deciding on the appropriate action.

On the other hand, statements that imply all risks should be avoided or that only trivial risks may be accepted do not reflect the real