In risk management, what does 'responding to risks' typically involve?

Responding to risks in the context of risk management predominantly involves implementing strategies to either mitigate or accept those risks. This process is essential because it directly addresses how an organization can manage potential threats to its objectives and operations. Mitigation strategies may include developing contingency plans, using insurance, or enhancing internal controls to reduce the likelihood of a risk occurring or its impact. Acceptance of risk may be appropriate when the cost of mitigation exceeds the potential loss from the risk, thereby allowing the organization to operate with a clear understanding of its risk profile.

While compliance with legal statutes and reporting risks to management are important components of a comprehensive risk management framework, they do not directly represent the act of responding to risks. These activities support the overall risk management process, but the core response involves enacting tactical measures to directly handle the risks themselves through mitigation or acceptance. Thus, the key focus in risk response is centered on strategic actions taken to address identified risks, making the answer centered on mitigating or accepting risks the correct choice.