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Definition of a risk

A risk can be defined as an effect of uncertainty on the objective. It is a different outcome from what you expected and can address, create or result in opportunities and threats.

  • Risk is not an expected adverse development. If you expect the outcome, it is not a risk.
  • Risk is not a difficulty or a challenge if you are already aware that the situation exists now.

MORE IDEAS FROM THE SAME ARTICLE

  • Threat – the source of the risk event that causes uncertainty.
  • Risk exposures – the amount that theoretically is at risk if the threat becomes a reality.
  • Risk – the collection of threats/causes and exposures that are treated ...

Identifying as many risks as possible often leads to not being able to manage it all properly.

  • First, identify the risks with the largest potential loss or financial impact. Then collect smaller risks together that can be managed as a group. Smaller risks have minor financial co...

One method is to ask the people with knowledge about the functioning of the organization, what could go wrong. It can be done using brainstorming, questionnaires, self-reporting etc. 

The second class of methods are more analytical and engineering methods. These methods are used to find hidden c...

Before you start risk management, it is important to identify the risks the company is exposed to.
Establish a catalogue of risks or a"risk register"

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