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Volume 32, Issue 3

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Thursday, 22 November 2007 00:33

Understanding and Communicating Risk Assessment

Written by  Henry Kalt

You have spent dozens of hours with your team listing the events that might cause a disaster or financial ruin at your company. You have identified the possible impacts through a business impact analysis. Thorough and detailed, you have lots of valuable information. But what does it all mean? And how do you present all this great information to senior management? How do you present risk in such a way so as to retain your credibility (i.e. not be perceived as crying out, “The sky is falling”)? The purpose of this article will be to detail a method of organizing your information in an easy to understand format that goes to the heart of the matter. We will begin by applying the model to operational risk. However, we will expand the model to encompass two other types of risk: competitive and financial. Impact and Probability The two key variables of risk assessment are impact