What is the goal of the retention strategy in risk management?

The goal of the retention strategy in risk management is to accept manageable risks. This approach involves recognizing that some risks are inherent to operations and that it is not always possible or practical to eliminate them completely. Instead of attempting to reduce every risk to zero, a retention strategy allows organizations to acknowledge certain risks and plan for them, investing in preparedness and mitigation measures rather than full avoidance.

By accepting manageable risks, organizations can focus their resources on more significant hazards while still running their operations effectively. This approach encourages a balanced perspective, where calculated risks are seen as part of strategic growth and innovation, rather than purely negative elements to be avoided at all costs. This acceptance often comes with establishing criteria for what constitutes a manageable risk, ensuring that the organization can handle potential impacts without catastrophic outcomes.