Which of the following is often considered a step in effective risk management?

Identifying potential risks is a fundamental step in effective risk management because it involves recognizing and understanding the threats that could impact an organization's objectives. By identifying these risks, organizations can develop strategies to mitigate their effects or manage them proactively. This process often includes analyzing different types of risks—such as operational, financial, strategic, and compliance risks—allowing for a comprehensive approach to managing potential challenges.

Effective risk management starts with a clear understanding of what the risks are, which enables organizations to prioritize them and allocate resources appropriately. This identification process can involve various techniques, including brainstorming sessions, expert interviews, and historical data analysis, helping to create a robust framework for future decision-making. It sets the foundation for subsequent steps, such as risk assessment and risk response planning.

The other options do not align with effective risk management practices. Ignoring past data would hinder the ability to learn from previous experiences, limiting awareness of potential future risks. Limiting stakeholder involvement would detract from the diverse viewpoints that can enrich the understanding of risks. Regularly avoiding assessments would prevent ongoing evaluation and adaptation to a changing risk environment, which is critical for maintaining resilience and responsiveness.