Reviewing the historical milestones of risk management

Risk management is a relatively recent discipline that advocates for the adoption of a risk-based approach in directing and controlling organizations. The ISO Guide 31073:2022, which provides standardized risk management vocabulary and terminology, defines it as a managerial tool that facilitates the direction and control of an organization with regard to risk. Risk management focuses on establishing strategies, policies, and procedures that enable organizations to achieve their objectives while safeguarding and protecting their assets. This leads to the preservation of the value of an organization’s critical resources and involves identifying, analyzing, evaluating, and responding appropriately to risk factors, which are inevitable in business life. Effective risk management should not be conducted in isolation or silos, but rather through an enterprise risk management (ERM) approach. ERM is a proactive attempt to manage uncertainties about future outcomes to protect and create value for organizations. Although several studies have examined the historical evolution of risk management, they have primarily focused on specific areas of application, such as financial risk management, supply chain risk management, or project risk management. As a result, there is a lack of comprehensive historical reviews that represent the evolution of risk management as a general concept. The present research aims to fill this literature gap by demonstrating the major milestones in the progression of risk management. This will not only provide a snapshot of risk management development but also an understanding of its significance as a modern discipline that contributes to organizational success. Therefore, this paper does not intend to thoroughly review the risk management literature but rather attempts to historically review the main breakthroughs in this significant field to represent the chronological evolution of risk management.