Primer on risk analysis : decision making under uncertainty

Description

Cover Half Title Title Page Copyright Page Dedication Contents Preface About the Author Chapter 1: The basics 1.1 What is risk? 1.2 How do we identify a risk? 1.2.1 Trigger 1.2.2 Hazard or opportunity 1.2.3 Consequence 1.2.4 Sequence of events 1.2.5 Uncertainty 1.3 What is risk analysis? 1.3.1 Risk management 1.3.2 Risk assessment 1.3.3 Risk communication 1.3.4 Risk semantics 1.4 Why do risk analysis? 1.5 Who does risk analysis? 1.5.1 A brief historical perspective on risk analysis 1.5.2 Government agencies 1.5.3 Private sector 1.6 When should we do risk analysis? 1.7 Organization of this book 1.8 Summary and look forward References Chapter 2: Uncertainty 2.1 Introduction 2.2 Uncertainty from 75,000 feet 2.3 The uncertainty on your desk 2.3.1 Knowledge uncertainty or natural variability? 2.3.2 Types of uncertainty 2.3.3 Quantity uncertainty 2.3.3.1 Empirical quantities 2.3.3.2 Defined constants 2.3.3.3 Decision variables 2.3.3.4 Value parameters 2.3.3.5 Index variables 2.3.3.6 Model domain parameters 2.3.3.7 Outcome criteria 2.3.4 Sources of uncertainty in empirical quantities 2.3.4.1 Random error and statistical variation 2.3.4.2 Systematic error and subjective judgment 2.3.4.3 Linguistic imprecision 2.3.4.4 Natural variability 2.3.4.5 Randomness and unpredictability 2.3.4.6 Disagreement 2.3.4.7 Approximation 2.4 Being intentional about uncertainty 2.5 Summary and look forward References Chapter 3: Risk management 3.1 Introduction 3.2 Identifying risks 3.2.1 Problem recognition 3.2.2 Problem acceptance 3.2.3 Problem definition 3.2.4 From problems and opportunities to risks 3.3 Risk estimation 3.3.1 Establish a risk analysis process 3.3.2 Individual risk management activities 3.3.2.1 Develop a risk profile 3.3.2.2 Establish risk management objectives 3.3.2.3 Decide the need for a risk assessment 3.3.2.4 Request information needed 3.3.2.5 Initiate the risk assessment 3.3.2.6 Consider the results of the risk assessment 3.4 Risk evaluation 3.4.1 Principles for establishing acceptable and tolerable levels of risk 3.4.1.1 Policy 3.4.1.2 Zero risk 3.4.1.3 Weight of evidence 3.4.1.4 Precautionary principle 3.4.1.5 ALARA principle 3.4.1.6 Appropriate level of protection 3.4.1.7 Reasonable relationship 3.4.1.8 Safety and balancing standards 3.4.2 The decision 3.5 Risk control 3.5.1 Formulating risk management options 3.5.2 Evaluating risk management options 3.5.2.1 Comparison methods 3.5.3 Comparing risk management options 3.5.3.1 Multicriteria decision analysis 3.5.4 Making a decision 3.5.5 Identifying decision outcomes 3.5.6 Implementing the decision 3.6 Risk monitoring 3.6.1 Monitoring 3.6.2 Evaluation and iteration 3.7 Risk communication 3.8 Risk management models 3.9 Summary and look forward References Chapter 4: Risk assessment 4.1 Introduction 4.2 What makes a good risk assessment? 4.3 Risk assessment defined 4.4 Risk assessment activities 4.4.1 Understand the questions 4.4.2 Identify the source of the risk 4.4.3 Consequence assessment 4.4.3.1 Dose-response relationships 4.4.4 Likelihood assessment 4.4.4.1 Exposure assessment 4.4.5 Risk characterization 4.4.6 Assess effectiveness of risk management options 4.4.7 Communicate uncertainty 4.4.8 Document the process 4.5 Risk assessment models 4.6 Risk assessment methods 4.6.1 Qualitative risk assessment 4.6.2 Quantitative risk assessment 4.7 Summary and look forward References Chapter 5: Risk communication 5.1 Introduction 5.2 Definitions 5.3 Internal risk communication 5.3.1 Coordination between assessors and managers 5.3.2 Risk communication process 5.3.3 Documenting the process 5.4 External risk communication 5.4.1 Risk and crisis communication 5.4.1.1 Risk dimensions 5.4.1.2 Risk perceptions 5.4.1.3 Know and engage your audience 5.4.1.4 Psychographic information 5.4.1.5 Risk, stress, and the communication model 5.4.1.6 Three M’s of risk communication 5.4.1.7 Critical differences in crisis communication 5.4.1.8 Explaining risk to nonexperts 5.4.1.9 Explaining uncertainty 5.4.2 Public involvement 5.4.2.1 Planning stakeholder involvement 5.4.3 Conflict resolution 5.5 Summary and look forward References Chapter 6: Enterprise risk management 6.1 Introduction 6.2 What is enterprise risk management? 6.3 History 6.4 Trends in ERM 6.4.1 Global business risks 6.4.2 The financial sector 6.4.3 The state of enterprise risk management 6.5 Enterprise risk management for dummies 6.6 Risk management standards and guidance 6.7 ISO 31000:2018 risk management—guidelines 6.7.1 ISO 31000:2018 principles 6.7.2 ISO 31000:2018 framework 6.7.3 ISO 31000:2018 risk management process 6.8 COSO’s enterprise risk management integrated framework 6.8.1 Across the enterprise 6.8.2 Achievement of objectives 6.8.3 Components of COSO’s ERM framework 6.9 Three enterprise risk management concepts 6.9.1 Risk profile 6.9.2 Risk appetite 6.9.3 Risk tolerance 6.10 Summary and look forward References Chapter 7: Decision making under uncertainty 7.1 Introduction 7.2 Decision-making strategies 7.3 Evidence-based decision making 7.4 How much evidence is enough? 7.4.1 There is a best time to decide 7.5 Classifications of uncertainty 7.6 Strategies for deciding in deep uncertainty 7.7 Communicating uncertainty to decision makers 7.8 A practical approach 7.8.1 Understand the decision to be made 7.8.2 Understand the residual risks and residual uncertainty 7.8.3 Ask clarifying questions 7.8.4 Make a decision or not 7.9 Practical changes 7.9.1 Change the decision meeting 7.9.2 Question the numbers 7.9.3 Power down decision making 7.9.4 Socialize errors from good risk management 7.10 Risk metrics 7.11 Decision analysis 7.11.1 The example 7.11.2 Decision making without probability 7.11.3 Decision making with probability 7.11.4 Risk profile and sensitivity 7.11.5 Value of additional information 7.12 Summary References Index