Which of the following actions can a risk manager take to mitigate risks?

Implementing robust risk assessment and monitoring processes is a fundamental action for a risk manager to mitigate risks effectively. This approach allows for the identification, evaluation, and prioritization of risks, thereby enabling organizations to develop strategies to address those risks proactively. By monitoring risks continuously, a risk manager can respond to changes in the internal and external environment, ensuring that potential threats are managed before they can impact the organization significantly.

Risk assessment involves collecting data, analyzing potential risks, and understanding their implications for the business. Monitoring processes ensure that the organization remains vigilant about emerging risks, compliance issues, and the effectiveness of risk mitigation strategies. This creates a framework for continuous improvement and adaptation, which is essential in today’s fast-paced and complex financial landscape.

While the other options may be related to improving overall business performance or reducing costs, they do not specifically focus on the active management of risks, which is the core responsibility of a risk manager. Increasing marketing efforts, for instance, may lead to higher sales but does not address the potential risks associated with market fluctuations or operational challenges. Reducing staff levels could cut costs but may also introduce operational risks and impact organizational capacity. Similarly, aggressive market expansion carries its own set of risks, including operational, market, and reputational risks.