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Risk Glossary Cheat Sheet (DRAFT) by

A quick-reference guide to risk modelling concepts.

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Uncert­ainty Factors

Likelihood
How likely the event is to occur at any time
Frequency
How often the event will occur in a set period
Proximity
How soon the event will occur
Velocity
How quickly the conseq­uences occur after the event
Aleatory
Dependency on random change
Epistemic
Dependency on inform­ation
Confidence
How certain we are about our estimates
Predic­tab­ility
How much future events correspond to known past events
Credib­ility
Whether the event could reasonably happen
Interd­epe­ndence
Whether other events will contribute unpred­ictably
Ambiguity
When we are uncertain about the meaning of an event
Persis­tence
How long the risk remains valid

Impact Factors

Severity
The magnitude of the impact
Critic­ality
The importance of the impacted asset to a capability
Cascade
Subsequent effects
Irreve­rsi­bility
Whether the damage can be undone
Recove­rab­ility
How easily normal operations can be restored
Scope
How widespread the impact is
Fragil­ity­/An­tif­rag­ility
Whether the system worsens or improves under stress
Exposure
The degree of investment in the outcome under threat
Duration
How long the effect of the event lasts
 

Control Factors

Contro­lla­bility
Our degree of influence over causes or outcomes
Detect­ability
Our ability to recognise early indicators
Mitiga­bility
Our ability to reduce or contain the impact post-event
Dependency
Reliance on outsourced capabi­lities or third parties
Substi­tut­ability
Flexib­ility in replacing compro­mised assets

Systemic Factors

Asymmetry
A risk with a mismatch in positive outcome for overcoming vs negative outcome in failing
Opport­unity
A different view of risk focused on attempting to achieve positive outcomes rather than avoid negative conseq­uences
Systemic Risk
Risks that propagate or occur beyond our control
Cascading Risk
Dependency chains or knock-on effects
Concen­tration Risk
Lack of divers­ifi­cation leading to single points of failure
Knightian Uncert­ainty
Fundam­entally unknowable risks, where we cannot meanin­gfully estimate probab­ility
Volitional Risk
A risk we have chosen to take in pursuit of goals
Emergent Risk
In complex systems novel, unmodelled outcomes may become apparent and should be antici­pated
 

Behavi­oural Factors

Perceived Risk
Subjective perception of risk drives action
Appetite
The amount of risk we are willing to take in pursuit of a goal
Tolerance
The variance from appetite we are willing to accept before taking action
Confidence
Over- and underc­onf­idence distort judgment and are difficult to measure accurately
Commun­ication
Effect­iveness of inform­ation sharing affects unders­tanding of risk
Cognitive Bias
Various cognitive biases affect how we perceive and react to risk
Moral Hazard
Incentives misaligned with exposure, i.e. "­playing with someone else's money"

Meta Factors

Framing
The story you tell about why to take/treat a risk
Model Risk
Reliance on an inaccurate or inappr­opriate model
Compre­hen­sib­ility
Whether decisi­on-­makers understand the inform­ation presented, simpler models encourage action while complex ones discourage it
Volition vs Fate
Clarifies which risks are contro­llable