What is a common outcome of effective risk management?

A common outcome of effective risk management is greater business stability. This occurs because effective risk management identifies potential risks that could negatively impact the organization and implements strategies to mitigate those risks. By addressing uncertainties and preparing for potential challenges, businesses can maintain smoother operations, protect their assets, and enhance their reputation.

When risks are managed well, it creates a more predictable environment, allowing for better decision-making and strategic planning. For instance, when a company can foresee and address issues such as supply chain disruptions or compliance failures, it is less likely to face sudden crises that could destabilize operations. This stability can also lead to increased confidence among stakeholders, including employees, customers, and investors, thereby fostering a positive organizational culture and enhancing overall performance. Therefore, the correct answer reflects a key benefit of sound risk management practices.