Definition of Risk Cause
- The underlying reason or event that can trigger a risk.
- It acts as a risk trigger, such as an event, action, or change in conditions that leads to a risky situation.
- Causes of risk include intentional harmful action, attack, natural disaster, technological failures, environmental factors, human error and the like
- Essentially, the cause of a risk is a threat or danger.
Difference Between Cause, Risk, and Impact
- Cause: The origin or underlying reason behind a potential risk. For example, "increasing cyber-attacks."
- Source: The process or asset involved.
- Risk: The potential event or situation that could occur due to the cause. For example, "customer data breach"
- Impact: The consequences or effects if the risk materializes. For example, "financial losses and reputational damage."
- Would you like more examples or further clarification on any of these elements?
Examples of The Most Common Risk Causes in Small and Medium Businesses
- Cybersecurity threats: Increasing cyber-attacks can lead to data breaches and financial losses.
- Regulatory changes: New laws and regulations can impact operations and compliance.
- Economic conditions: Market fluctuations and economic downturns can affect profitability.
- Operational failures: Issues in day-to-day operations, such as equipment breakdowns or supply chain disruptions.
- Human errors: Mistakes or misconduct by employees can lead to significant risks.
- Natural disasters: Events like hurricanes, earthquakes, or floods can damage assets and disrupt business activities.
- Technological failures: Outdated or malfunctioning technology can hinder business processes
How to Describe the Cause of the Risk in the Risk Catalog
- Include the Cause in the Risk Statement: Ensure the cause of the risk is part of the risk description itself.
- Brief Description: You can also describe the cause briefly in words.
- Association with Source: The cause of the risk is linked to the source, which could be a process or a company resource (e.g., technology, people).
Steps to Add a New Risk
- Open the Risk Register.
- Press "New Risk": Click the button to enter a new risk.
- List the Risk: This will add the risk to the risk register.
- Include the Cause in the Name: Follow the instructions above to include the cause in the risk name.
