Section 9.84 Risk Register Flashcards
Objective 5.2: Explain elements of the risk management process
Risk Management
Crucial for projects and business, it involves the identification and assessment of uncertainties that may impact objectives
Risk Register
A dopcument that records identified risks, descriptions, impacts, likelihoods, and mitigation actions
■ Key tool in risk management
■ May resemble a heat map risk matrix
■ Facilitates communication and risk tracking
■ Key component of project and business operations
Components of Risk Register
1 Risk Description
● Identifies and describes the risk
● Clear and concise description
Components of Risk Register
2 Risk Impact
● Potential consequences of risk occurrence
● Rated on a scale (e.g., low, medium, high)
Components of Risk Register
3 Risk Likelihood
● Probability of risk occurrence
● Rated on a scale (e.g., numerical or descriptive)
Components of Risk Register
4 Risk Outcome
● Result of the risk if it occurs
● Related to impact and likelihood
Components of Risk Register
5 Risk Level or Threshold
● Determined by combining the impact and likelihood
● Prioritises risks (e.g., high, medium, low)
Components of Risk Register
6 Cost
Financial impact on the project
● includes potential expenses if it occurs or the cost of risk mitigation
Components of Risk Register
7 Risk Tolerance/Risk Acceptance
● An organization or individual’s willingness to deal with uncertainty in
pursuit of their goals
● Maximum amount of risk they are willing to accept
● Acceptance without countermeasures
Components of Risk Register
Risk Appetite
● Willingness to pursue or retain risk
● Types:
○ Expansionary: Open to taking more risk for potential of high returns
○ Conservative: Tke less risks even if taking less returns want sustainability
○ Neutral: Balance between risk and return - calculated
Key Risk Indicators (KRIs)
Critical predictive metrics signaling increasing risk exposure
■ Provide early warning of potential risks
■ Tied to the organisations objectives
■ Used to monitor risk changes and take proactive steps
Risk Owner
Person repsonsible for managing the risk
■ Monitors, implements mitigation actions, and updates Risk Register
■ Accountable for risk management
Project Managers
