What is Risk Capacity

Importance of risk exposure and risk management practices have attracted the attention of companies, investors, and all other parties who benefit from performances of companies. Competitive environment and global effects force the companies to pay attention to manage their risks. Therefore, governmental bodies and international associations embarked on researches in risk management and as a result of these efforts regulations have been put in place. Germany, USA, and UK are the leading countries that made significant progress in risk management field by enacting laws, regulations, and issuing guidelines. But the subject is still new for some countries and difficult for companies, especially small and medium sized, to apply. The chapter starts with the benefits and importance of risk management. Then steps of risk management are explained with the examples.