In risk management terminology, what does the term 'control' mean?

The term 'control' in risk management refers to a mechanism implemented to mitigate identified risks. This definition captures the essence of how organizations manage uncertainties that can affect their objectives. Controls can take various forms, such as policies, procedures, practices, or technologies designed to minimize the potential impact of risks or reduce the likelihood of their occurrence.

In this context, controls are essential components of a risk management framework because they are proactive measures intended to protect the organization from harm. By identifying specific risks and implementing appropriate controls, organizations can ensure a structured approach to risk mitigation, ultimately enhancing their stability and resilience.

Contrastingly, while following rules is important, that concept relates more closely to compliance rather than the active risk management focus of controls. Delaying decision-making does not align with the purpose of controls, which aims to streamline processes and address risks promptly. Lastly, enhancing profitability may be a potential benefit of effective risk management and controls but does not define what a control is in the context of risk management.