Governance, Risk, and Compliance (GRC) Analyst Practice Test

Risk mitigation refers to the process of implementing strategies and actions aimed at reducing either the likelihood of a risk occurring or its potential impact on an organization. This involves a systematic approach to identify potential risks, assess their significance, and develop appropriate measures to address them. By doing so, organizations can enhance their resilience and ensure smoother operations amidst uncertainties.

Strategies for risk mitigation can include a variety of approaches such as developing contingency plans, deploying alternative measures, increasing controls, or improving processes. This proactive philosophy is essential for effective governance, as it not only minimizes potential disruptions but also aids in maintaining compliance with regulatory requirements and safeguarding assets.

The other options highlight approaches that do not effectively align with the concept of risk mitigation. For instance, creating new risks or ignoring small risks does not address the underlying challenges that might threaten organizational stability. Transferring all risks to third parties may not always be feasible or prudent, as organizations must often retain some level of responsibility and control over certain risks. Therefore, the essence of risk mitigation truly lies in actively working to reduce the impact or likelihood of those identified risks.