What is proper risk management?
Proper risk management implies control of possible future events and is proactive rather than reactive. For example: An activity in a network requires that a new technology be developed. Proper risk management will reduce not only the likelihood of an event occurring, but also the magnitude of its impact.
What are the 4 ways to manage risk?
Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories:Avoidance (eliminate, withdraw from or not become involved)Reduction (optimize – mitigate)Sharing (transfer – outsource or insure)Retention (accept and budget)
What are the 10 principles of risk management?
These risks include health; safety; fire; environmental; financial; technological; investment and expansion. The 10 P’s approach considers the positives and negatives of each situation, assessing both the short and the long term risk.
What is a 5×5 risk matrix?
Because a 5×5 risk matrix is just a way of calculating risk with 5 categories for likelihood, and 5 categories severity. Each risk box in the matrix represents the combination of a particular level of likelihood and consequence, and can be assigned either a numerical or descriptive risk value (the risk estimate).