ABSTRACT
Using the International Organization for Standardization (ISO) 31000 eight-step risk management process, this chapter briefly examines how people interact with the risk management process. It utilizes the Committee of Sponsoring Organizations of the Treadway Commission (COSO) definition of uncertainty as being 'the state of not knowing how potential events may or may not manifest'. The chapter considers the perceptions we have concerning uncertainty, and what matters, across three important areas that affect us all – our wealth, our health and the weather – and how words used in these areas make such a huge difference in our ability to understand and manage risk. The Risk-Type Compass tool helps to better understand the tendency of individuals and groups within an organization to take risk, and their ability to cope with the occurrence of risk. To fully understand the risks on a risk register, the risk should be linked to its causes and consequences.
