When identifying risk

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 consequences.
• Risk should not ‘overlap.’ It could lead to the wrong results.
• Avoid too vague risks.
• Lack of imagination. Major disasters are the unimaginable ones that have never happened before. You can always dismiss it later if rigorous analyses show that the risk is unrealistic.