TABLE OF CONTENTS "Scientists may be able to explain the facts, but the facts rarely speak for themselves. The facts are interpreted by individuals who may behave in quite different ways to those which scientists or public policy makers or the industrialists originally intended."
Howard Newby (1997)
The previous chapter established the need for risk management and some of the important roles that risk management plays in a range of corporate, legal and social contexts. This chapter discusses the principal issues surrounding the measurement of risk, how it is estimated, how it can be presented for appropriate decision making and how it can be perceived by the stakeholders. It provides an overview that will be expanded in subsequent chapters.
Here we investigate various risk measures that can be used for a variety of applications. These seek to address the key areas of process related risks given in Table 1-1.
The discussion so far in Chapter 1 has established the following:
All activities are associated with some risk.
In order to make a commercial enterprise successful, it is necessary to identify and manage the risks.
The two-dimensional nature of risk (likelihood and consequence) has to be recognised for effective risk management.
Not only the experts' world-view of risk, but that of the non-expert should be given due consideration in the risk management process, if the latter have an input into decision making.
A decision made based on risk assessment, followed by the implementation of a...
