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Risk

In simple terms, risk is the possibility of something bad happening.[1] Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences.[2] Many different definitions have been proposed. The international standard definition of risk for common understanding in different applications is "effect of uncertainty on objectives".[3]

For other uses, see Risk (disambiguation).

The understanding of risk, the methods of assessment and management, the descriptions of risk and even the definitions of risk differ in different practice areas (business, economics, environment, finance, information technology, health, insurance, safety, security etc). This article provides links to more detailed articles on these areas. The international standard for risk management, ISO 31000, provides principles and general guidelines on managing risks faced by organizations.[4]

Definitions of risk[edit]

Oxford English Dictionary[edit]

The Oxford English Dictionary (OED) cites the earliest use of the word in English (in the spelling of risque from its French original, 'risque') as of 1621, and the spelling as risk from 1655. While including several other definitions, the OED 3rd edition defines risk as:

Communicating and consulting

Establishing the scope, context and criteria

- recognising and characterising risks, and evaluating their significance to support decision-making. This includes risk identification, risk analysis and risk evaluation.

Risk assessment

Risk treatment - selecting and implementing options for addressing risk.

Monitoring and reviewing

Recording and reporting

What can happen?

How likely is it to happen?

If it does happen, what would the consequences be?

Dread – the degree to which the hazard is feared or might be fatal, catastrophic, uncontrollable, inequitable, involuntary, increasing or difficult to reduce.

Unknown - the degree to which the hazard is unknown to those exposed, unobservable, delayed, novel or unknown to science.

Number of people exposed.

Other considerations[edit]

Risk and uncertainty[edit]

In his seminal 1921 work Risk, Uncertainty, and Profit, Frank Knight established the distinction between risk and uncertainty.

2001: The Science of Conjecture: Evidence and Probability Before Pascal, Baltimore: Johns Hopkins University Press.

James Franklin

John Handmer; (2005). "Trust Us and Be Scared: The Changing Nature of Risk". Global Society. 21 (1): 119–30.

Paul James

1996: Modern Society Shocked by its Risks (= University of Hong Kong, Department of Sociology Occasional Papers 17), Hong Kong, available via HKU Scholars HUB

Niklas Luhmann

– The entry of the Stanford Encyclopedia of Philosophy

Risk