Fundamentals of Risk Management

Risk management terminology
Most risk management publications refer to the benefits of having a common
language of risk within the organization. Many organizations manage to achieve this 

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Risk management
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common language and common understanding of risk management processes and 
protocols at least internally. However, it is usually the case that within a business 
sector, and sometimes even within individual organizations, the development of
a common language of risk can be very challenging.
Reference and supporting materials use a great range of terminologies. The different 
approaches to risk management, the different risk management standards that exist 
and the wide range of guidance material that is available often use different terms 
for the same feature or concept. This is regrettable and can be very confusing, but it 
is inescapable.
Attempts are being made to develop a standardized language of risk, and ISO 
Guide 73 has been developed as the common terminology that should be used in 
all ISO standards. The terminology set out in ISO Guide 73 is used throughout this 
book as the default set of definitions wherever possible. However, the use of a standard 
terminology is not always possible and alternative definitions may be required. 
Indeed, ISO itself also publish a terminology guide, ISO/IEC Guide 51:1999, entitled 
‘Safety Aspects: – Guidelines for Their Inclusion in Standards’, and the definitions in 
Guide 51 are not fully aligned with those in Guide 73.
To assist with the difficult area of terminology, Appendix B sets out the basic terms 
and definitions that are used in risk management. It also provides cross reference 
between the different terms in use to describe the same concept. Where appropriate and 
necessary a table setting out a range of definitions for the same concept is included 
within the relevant chapter of the book, and these tables are cross-referenced in 
Appendix B.