Definitions of Risk

  • Risk is the possibility of something bad happening.
  • Risk involves uncertainty about the effects/implications of an activity.
  • The international standard definition of risk is the effect of uncertainty on objectives.
  • Risk can be characterized by potential events and consequences.
  • Risk is often expressed in terms of the combination of consequences and likelihood of occurrence.
  • The earliest use of the word risk in English dates back to 1621.
  • The Oxford English Dictionary defines risk as the possibility of loss, injury, or other adverse circumstances.
  • The Cambridge Advanced Learners Dictionary defines risk as the possibility of something bad happening.
  • The ISO Guide 73 defines risk as the effect of uncertainty on objectives.
  • Risk can be a deviation from the expected, either positive or negative.
  • Objectives can have different aspects and apply at different levels.
  • Uncertainty refers to the deficiency of information related to an event, its consequence, or likelihood.
  • Risk was originally used as a synonym for hazard, meaning a potential source of harm.
  • Risk can be defined as the chance of harm or the probability of unwanted events.
  • Risk is linked to uncertainty, which is a broader term than chance or probability.
  • Risk can be seen as measurable uncertainty, applicable to both positive and negative outcomes.
  • In finance, risk is often equated to the volatility of return.

Practice Areas

  • The understanding, management, and measurement of risk differ across different practice areas.
  • Business risks arise from uncertainty about the profit of a commercial business.
  • Business risks can be controlled through risk management techniques.
  • Enterprise risk management includes methods and processes to manage risks and seize opportunities.
  • Risk management practices vary in different industries and sectors.

Economic Risk

  • Economic risk arises from uncertainty about economic outcomes.
  • Examples of economic risk include exchange rate fluctuations, government regulation, and political stability.
  • Risk in economics is often defined as quantifiable uncertainty about gains and losses.
  • Economic risk can affect investments and a company's prospects.
  • Macroeconomic conditions can impact economic risk.

Environmental Risk

  • Environmental risk arises from environmental hazards and issues.
  • Risk in the environmental context refers to the chance of harmful effects to human health or ecological systems.
  • Environmental risk assessment aims to assess the effects of stressors, such as chemicals, on the local environment.
  • Environmental risk is an important consideration in public health and policy decisions.
  • Environmental risk can have long-term impacts on human health and the environment.

Financial Risk

  • Financial risk arises from uncertainty about financial returns.
  • It includes market risk, credit risk, liquidity risk, and operational risk.
  • Risk in finance is the possibility that the actual return on an investment will be different from its expected return.
  • Financial risk modeling measures the aggregate risk in a financial portfolio.
  • Investments with greater inherent risk often promise higher expected returns.

Health Risk

  • Health risks arise from disease and other biological hazards.
  • Epidemiology is the study and analysis of the distribution, patterns, and determinants of health and disease.
  • Risk assessment in public health characterizes the nature and likelihood of harmful effects to individuals or populations.
  • Health risk assessment can be qualitative or include statistical estimates of probabilities.
  • Health risk assessments provide individuals with an evaluation of their health risks and quality of life.

Health, Safety, and Environment Risks

  • Health, safety, and environment (HSE) risks are often linked due to organizational management structures.
  • A single risk event may have impacts in all three areas over differing timescales.
  • Examples include the release of radiation or toxic chemicals, which can have immediate safety consequences, long-term health impacts, and lasting environmental impacts.
  • HSE risks require comprehensive management and mitigation strategies.
  • Events like Chernobyl highlight the interconnectedness of health, safety, and environment risks.

Risk Management

  • Risk management is a systematic approach to managing risks.
  • It consists of coordinated activities to direct and control an organization with regard to risk.
  • ISO 31000 is the international standard for risk management.
  • The risk management process includes communicating and consulting.
  • It also involves establishing the scope, context, and criteria.

Risk Assessment

  • Risk assessment is a systematic approach to recognizing and characterizing risks.
  • It involves evaluating the significance of risks to support decision-making.
  • Risk assessment can be qualitative, semi-quantitative, or quantitative.
  • Qualitative approaches rely on judgment to evaluate the significance of risks.
  • Semi-quantitative approaches use numerical rating scales and risk matrices.

Risk Identification

  • Risk identification is the process of finding, recognizing, and recording risks.
  • It involves identifying risk sources, events, causes, and potential consequences.
  • ISO 31000 describes it as the first step in a risk assessment process.
  • Different methods for identifying risks include checklists, evidence-based methods, and team-based methods.
  • Techniques like scenario analysis and expert-elicitation methods can also be used for risk identification.

Risk Analysis

  • Risk analysis is about developing an understanding of the risk.
  • It helps comprehend the nature of risk and determine the level of risk.
  • In the ISO 31000 risk assessment process, risk analysis follows risk identification.
  • It precedes risk evaluation.
  • Risk analysis can involve various techniques such as quantitative risk assessment and probabilistic risk assessment.

Risk Treatment

  • Risk treatment involves selecting and implementing options for addressing risk.
  • It aims to reduce or prevent risks in contexts where risks are harmful.
  • In the safety field, risk treatment aims to protect employees, the general public, the environment, and company assets.
  • Risk treatment is also about identifying opportunities and achieving a balance between innovation and avoiding crises.
  • It plays a role in setting strategy, achieving objectives, and making informed decisions.

Risk Mentions


Risk Data Sources

Reference URL
Glossary https://www.alternix.com/blogs/glossary-of-terms/risk
Wikipedia http://en.wikipedia.org/wiki/Risk
Wikidata https://www.wikidata.org/wiki/Q104493
Knowledge Graph https://www.google.com/search?kgmid=/m/06d5f