Fundamentals of Risk Management

Risk assessment considerations
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between 100 and 200. After the risk rating has been completed, it is typical for
the number of priority significant risks faced by the organization to be identified as 
between 10 and 20. The terminology used in ISO 31000 is a combination of likeli-
hood and impact of a risk, and is considered to be the level of risk, although this is 
referred to by many risk practitioners as the risk severity.
There are many alternative versions of tables that provide definitions for terms 
used to describe likelihood and impact. An organization will need to produce its own 
definitions, based on the size, nature and complexity of that organization. Table 10.5 
provides generic definitions of likelihood in terms of the number of occasions
when the event is likely to occur over a 10-year period. Table 10.6 provides defini-
tions of impact that could be used in a hospital where patient safety is the primary 
consideration.
Risk perception
When undertaking risk assessment exercises, it is often the case that different attendees 
at the workshop will have different views of the risk. There are several ways of
accommodating differing opinions. In some cases, voting software can be used in 
order to identify the majority view. This has the benefit that it is a simple means of 
identifying the average group position, at the same time as demonstrating the spread 
of opinions.
However, it is often beneficial to discuss why people have different views of a risk. 
By exploring why their views differ, it is often possible to reach an agreed common 
position. This will have the benefit that more appropriate control measures will then 
be identified and implemented. The perception of risk by individuals will be affected 
by a number of factors. The following are considered to increase concern amongst 
the general public in relation to a specific risk to health:
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involuntary (pollution) rather than voluntary (dangerous sports);
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inequitably distributed (some benefit while others suffer);
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inescapable by taking personal precautions;
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arising from an unfamiliar or novel source;
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resulting from human-made, rather than natural, sources;
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causing hidden and irreversible damage, perhaps years after exposure;
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posing particular danger to small children or pregnant women;
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threatening form of death (or illness/injury) arousing particular dread.
Different views on the importance of a risk can be present at different levels of
seniority within the organization. It is useful for the risk assessment process to draw 
opinions from all levels of management, so that different perspectives of a risk can 
be identified. Again, the benefits of this approach are better risk communication, 
fuller risk understanding and the identification of appropriate and practical control 
measures.

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