Formal and Informal Management of Risks Essay Example | Topics and Well Written Essays - 1000 words

Formal and Informal Management of Risks - Essay Example There can be a positive news though as some of what had appeared as risks would turn out as actually opportunities. Thus, monitoring on how the risks would unfold is a must. Investors can use indicators in monitoring risks. Price, price change, price change over time, the speed of price change and price movements in relation to a price reference like the price of the stock or equity, a year ago, two years ago, three years ago, or based on the equity’s average price over a period of history. All these are indicators or variables from which indicators can be developed or devised to put up a monitoring system in how risks may be developed and transform into serious threats or even opportunities. The monitoring system, for example, may identify what indicators or variables to monitor as well as the schedule in which the monitoring should take place. Meanwhile, Wood et al. focused on the management of risk as an element of risk governance and internal control. The Wood et al. persp ective only emphasize that the management of risks must be considered as an everyday task of management. In this  way, however, life is also a management of risks. In living we are confronted with many risks: risk of bankruptcy with a major change in the prices of equity, hurricane, typhoon, drought, tsunami, earthquake, heat wave, climate change and the like. Some of the risks are particularly important in some periods and some become less important in a particular period. Our lives have informally developed a monitoring system for these.