Principles of the management of risk

Publisher Summary This chapter discusses about principles of the management of risk. The Ministry of Labor and National Service postulated six principles of accident prevention in 1956 that are still valid presently:(1) accident prevention is an essential part of good management and of good workmanship, (2) management and workers must co-operate whole heartedly in securing freedom from accidents, (3) top management must take the lead in organizing safety in the works, (4) there must be a definite and known safety policy in each workplace, (5) the organization and resources necessary to carry out the policy must exist, and (6)the best available knowledge and methods must be applied. Risk management may be defined as the eradication or minimization of the adverse effects of the pure risks to which an organization is exposed. Pure risks can only result in a loss to the organization, whereas with speculative risks, either gain or loss may result.