Final answer:
A control in risk management is a measure designed to minimize the likelihood or impact of a risk. These measures are proactive steps, such as policies or procedures, put in place to manage potential threats. Ignoring risks can lead to catastrophic outcomes, making effective control measures crucial for risk mitigation.
Step-by-step explanation:
In terms of risk management, a control is a measure taken to reduce the probability or severity of a threat. Controls are essential in managing risks, ensuring that potential negative outcomes are mitigated. These measures can be procedures, policies, or technologies implemented to provide reasonable assurance against the risks presents in operations or activities.
For instance, in environmental management, a control might involve regular monitoring of protected areas to prevent illegal poaching. Similarly, in finance, it could involve diversifying investments to minimize the impact of market volatility. Controls are a proactive approach to managing risk, rather than a reactive one, and they can also be part of contingency planning for when risks manifest.
The choice between different plans, as mentioned in the reference, addresses the concept of asymmetric risk and reflects the importance of controls. Ignoring potential catastrophic risks can have dire consequences, which is why proactive measures (controls) are preferred over merely reacting to events as they unfold.