Set risk limits and responsibilities

Decide which risks are acceptable in pursuing your goals, considering both the potential benefits and what the business could withstand if things go wrong. Set practical limits, such as how much cash can be committed to a project without endangering essential payments.

Account for the risk that remains after safeguards are in place, and assign each important risk to someone with the authority and resources to manage it. Make clear which warning signs require corrective action, further review, or a decision from the owner.

These boundaries help people make consistent decisions and give important concerns a clear path to someone who can act.