Defines the policy for managing risks and the relevance to the organization’s strategic plan, goals, and objectives; clarifies risk management goals and direction; outlines the fundamental guidelines of the risk management function; focuses on fundamentals and addresses ideas that may not otherwise be presented to the organization; forces senior management to actively consider an organization’s risk tolerance to increase the value of the risk management program; clearly specifies responsibility and authority, opens up lines of communication, and minimizes duplication of efforts.
