In the wake of the global financial sector meltdown, contemporary jargon is sprinkled with references to “risk appetite”, “enterprise risk management”, “risk assessment matrix”, etc.
All of this fits under the general heading of “risk management”. But what is it?
The term “risk” didn’t even appear in the English language until the 17th century, replacing what today would be the anachronistic concepts of good or bad fortune.
In simple terms, risk management is the process of identifying, measuring, and developing a response to control risk.
It can be convoluted:
RISK = (probability of an event) X (impact of an event)
But usually risk management is common sense:
• creating a back-up copy of data on your computer hard drive.
• sanding icy sidewalks.
• maintaining vehicle tires, brakes, and exhaust systems.
Living in Ontario brings its own challenges and the necessary managing of risk – particularly in winter. The National Post reports:
“Of all the hazards on winter roads, one of the most dangerous is also one of the least publicized: driver laziness.”
The article went on to explain the findings of a recent survey: 1 in 3 drivers fail to properly clear the windshield and other vehicle glass before heading out into traffic.
Further observation: “men appear to be worse offenders than women” – confirming again that often risk management is simply common sense.
* Continental Tyre European Survey – reported in National Post – January 12, 2010
In the wake of the global financial sector meltdown, contemporary jargon is sprinkled with references to “risk appetite”, “enterprise risk management”, “risk assessment matrix”, etc.
All of this fits under the general heading of “risk management”. But what is it?
The term “risk” didn’t even appear in the English language until the 17th century, replacing what today would be the anachronistic concepts of good or bad fortune.
In simple terms, risk management is the process of identifying, measuring, and developing a response to control risk.
It can be convoluted:
RISK = (probability of an event) X (impact of an event)
But usually risk management is common sense:
• creating a back-up copy of data on your computer hard drive.
• sanding icy sidewalks.
• maintaining vehicle tires, brakes, and exhaust systems.
Living in Ontario brings its own challenges and the necessary managing of risk – particularly in winter. The National Post reports:
“Of all the hazards on winter roads, one of the most dangerous is also one of the least publicized: driver laziness.”
The article went on to explain the findings of a recent survey: 1 in 3 drivers fail to properly clear the windshield and other vehicle glass before heading out into traffic.
Further observation: “men appear to be worse offenders than women” – confirming again that often risk management is simply common sense.
* Continental Tyre European Survey – reported in National Post – January 12, 2010
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