Definition:
The level of risk that remains after all mitigation efforts have been applied to a project.
Key Components:
- Risk Mitigation Measures: Steps taken to reduce threats.
- Acceptable Risk Level: Determining whether the remaining risk is tolerable.
- Monitoring Strategy: Ongoing observation of residual risks.
Use Cases/Industries:
- Construction: Managing residual safety risks even after protective measures.
- Energy Sector: Accepting certain regulatory risks despite compliance efforts.
- Healthcare: Addressing cybersecurity risks even after implementing firewalls.
Advantages:
- Helps Determine Risk Appetite: Defines how much risk a company is willing to accept.
- Prepares for Unforeseen Issues: Ensures ongoing risk monitoring.
Challenges:
- Unavoidable Nature: Some risks cannot be entirely eliminated.
- Difficult to Quantify: Not all residual risks can be precisely measured.
Related Terms:
Risk Tolerance, Risk Mitigation, Risk Management Strategy
Example:
A hydroelectric dam project acknowledged residual environmental risks even after implementing multiple mitigation measures.
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Synonyms:
Remaining Risk, Unmitigated Risk, Residual Uncertainty
