Risk Identification

Question 1

What is risk identification about?

Answer 1

Identifying the risks a company is facing is the pre-condition for all other risk management activities: only risks that have been identified can be assessed, responded to and controlled

Question 2

What requirements should ideally be satisfied by a risk identification process in a company? Why “ideally”, are there any conflicts that you see?

Answer 2

1. Complete & correct identification: existing and potential risks shall be identified completely, exactly and
   reliably
2. Early identification: risks shall be identified as early as possible so that the company can respond in time
   and effectively
3. Substantial & efficient identification: only relevant risks shall be considered; there shall be a reasonable
   relation between costs of identification and potential findings/benefits
4. Systematic & flexible identification: risk identification shall be a standardised, systematic and ongoing
   process which, however, shall be able to adapt to changing conditions
5. Prudential identification: risks that seem to be manageable and controllable shall not be
   underestimated
6. Accepted identification: psychological, spatial and organisational opposition shall be minimised