How does a mitigation approach benefit risk management?

A mitigation approach in risk management is designed to identify, assess, and prioritize risks, and then implement strategies to minimize or control the impact of those risks on an organization. By aligning with an organization's policy to control identified risks, this approach ensures that the risk management practices are consistent with the organization's objectives, compliance requirements, and overall risk appetite.

This alignment helps create a structured process for recognizing potential risks early, allocating appropriate resources to address them, and ultimately reducing the likelihood or impact of adverse events. By following an established policy, teams can work collaboratively towards common goals, ensuring that everyone understands the risks involved and the measures in place to mitigate them. This comprehensive framework not only enhances the resilience of the organization but also fosters an environment of proactive risk management that can adapt to changing circumstances.

The other options do not accurately represent the benefits of a mitigation approach. While it's important to address financial risks, a good risk management strategy considers all types of risks rather than focusing exclusively on one area. Similarly, while feedback mechanisms can be valuable, their primary function is not to mitigate risk but rather to improve communication and collaboration. The idea that a mitigation approach eliminates all risks is unrealistic; rather, it aims to manage them effectively within acceptable limits.