Vocabulary terms used in Risk Management

 Here's a list of key vocabulary terms used in Risk Management:

Core Concepts:

• Risk: The potential for an unwanted outcome or event to occur.
• Uncertainty: The lack of complete certainty about the outcome of an event.
• Threat: A potential source of harm or negative impact.
• Vulnerability: A weakness or flaw that can be exploited by a threat.
• Impact: The potential consequences of a risk event.
• Likelihood: The probability of a risk event occurring.

Risk Management Processes:

• Risk Identification: The process of identifying and cataloging potential risks.
• Risk Assessment: Evaluating the likelihood and impact of identified risks.
• Risk Treatment: Developing and implementing strategies to manage or mitigate risks.
• Risk Monitoring & Control: Continuously tracking and evaluating risks and adjusting responses as needed.

Risk Treatment Strategies:

• Risk Avoidance: Avoiding activities or decisions that could expose the organization to the risk.
• Risk Mitigation: Reducing the likelihood or impact of a risk through controls or safeguards.
• Risk Transfer: Shifting the risk to another party (e.g., insurance).
• Risk Acceptance: Accepting the potential consequences of a risk.

Other Key Terms:

• Risk Appetite: The amount of risk an organization is willing to accept.
• Risk Tolerance: The acceptable variation in outcomes around an organization's objectives.
• Controls: Measures implemented to reduce or eliminate risks.
• Key Risk Indicators (KRIs): Metrics used to monitor and track the level of risk.
• Residual Risk: The remaining level of risk after controls have been implemented.

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