The German Stock Corporation Act obliges the Supervisory Board to deal with the risk management of its company as part of its general supervisory duties. For medium-sized companies organized in other legal forms, the implementation of a structured system for early risk detection and prevention might also be useful.
Risk management includes assessment, management and communication, whereby the assessment covers the identification, analysis and evaluation of risks.
To begin with, the management of risks requires their identification. It can be problematic that different individuals perceive the same risk differently (selectively). If a risk is not recognized in the first place, it cannot be managed.
The main task of a risk management system is therefore to initially ensure the objective perception of risks.