Common perceptions of risk include; people being killed or injured, accidents and generally things going wrong. These are all important areas of risk but we should also consider other things that may give us cause for concern; they may include small but frequent problems that when they are added together cost a lot financially.

We should think about risk as a process that allows us to understand what we are already exposed to and to help us decide how to make things better. It is often the case that there is an opportunity for savings where business risks are over controlled in low risk areas.

Risk has three major elements:

We should not restrict ourselves to thinking that all risk is bad, we can use risk thinking to improve the way we do things, to identify opportunities and any potential for making things safer, more efficient, more profitable, etc.

There are many and diverse techniques for measuring and assessing risks but an important requirement is to be able to compare those risks against one another.

	Simple Risk Measurement		Comparing Risk

Risk, and its upside opportunity, affects us in everyday life and in business. You can learn more about this in “Risk in Life” and “Risk in Business” .

There is very little point in being able to quantify a risk if we have no idea how significant it is or how to manage that risk effectively. Good risk management is always a live process that constantly evolves and responds to change. In simple terms any risk management process should consist of

the following elements:

Click here to see an example of a Risk management process