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  • Risk Ranking Methodology (Rev.2)

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    Agus Marpaung
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    This document provides tables to help rank risks based on their likelihood and consequences. Table 1 lists consequences from insignificant to catastrophic on a scale of 1 to 5. Table 2 ranks likelihood of occurrence from rare to almost certain on a scale of 1 to 5 based on expected frequency. Table 3 is a risk matrix that combines the likelihood and consequence ratings to determine an overall risk level of low, moderate, high or extreme, with required risk management actions depending on the rating.

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    This document provides tables to help rank risks based on their likelihood and consequences. Table 1 lists consequences from insignificant to catastrophic on a scale of 1 to 5. Table 2 ranks likelihood of occurrence from rare to almost certain on a scale of 1 to 5 based on expected frequency. Table 3 is a risk matrix that combines the likelihood and consequence ratings to determine an overall risk level of low, moderate, high or extreme, with required risk management actions depending on the rating.

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    62 views1 page

    Risk Ranking Methodology (Rev.2)

    Uploaded by

    Agus Marpaung
    This document provides tables to help rank risks based on their likelihood and consequences. Table 1 lists consequences from insignificant to catastrophic on a scale of 1 to 5. Table 2 ranks likelihood of occurrence from rare to almost certain on a scale of 1 to 5 based on expected frequency. Table 3 is a risk matrix that combines the likelihood and consequence ratings to determine an overall risk level of low, moderate, high or extreme, with required risk management actions depending on the rating.

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    © All Rights Reserved
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    of 1

    RISK RANKING METHODOLOGY

    TABLE 3: RISK MATRIX


    TABLE 1: CONSEQUENCE (IMPACT) MATRIX

    Rating Descriptor
    Health and Financial
    Environment Reputation QUALITATIVE RISK ANALYSIS – LEVEL OF RISK
    Safety (US$)
    5
    Reporting (not front
    1 Insignificant No injuries < $10K Slight Effect page) in suburban Almost M 5 H 8 H 9 E 10 E 10
    newspapers Certain

    LIKELIHOOD RATING
    Reporting in
    $10K– 4
    2 Minor First Aid
    $100K
    Minor Effect suburban news M 4 M 7 H 8 E 9 E 10
    paper Likely
    Single disabling
    Reporting in local 3
    injury up to injury
    newspaper (not Moderat L 3 M 6 M 7 H 8 E 9
    3 Moderate resulting in $100K - $2M Local Effect
    front page) and/or
    permanent e
    regional inquiry
    disability.

    Single fatality or 2
    L 2 L 4 M 6 M 7 H 8
    multiple disabling Reporting in local Unlikely
    injuries up to a few TV news and/or
    4 Major
    resulting in
    $2M - $10M Major Effect
    departmental
    permanent investigation 1
    disability L 1 L 2 L 3 M 4 M 5
    Rare
    Reporting in
    national TV news
    Multiple fatality or 1 2 3 4 5
    5 Catastrophic
    large scale injuries
    > $10M Massive Effect headlines and/or
    Insignificant Minor Moderate Major Catastrophic
    government
    investigation
    IMPACT RATING
    TABLE 2 : LIKELIHOOD MATRIX
    Probability of LEGEND :
    Rating Descriptor Description Frequency
    Occurring
    The event may occur only Will occur in Risk
    Risk Rating Descriptor Required Actions
    1 Rare in exceptional exceptional < 10% Code
    circumstances circumstances

    Will occur once every Detailed research and


    The event could occur at 10 years (frequency 9-10 E Extreme risk management planning required at
    2 Unlikely
    some time will increase if PM/TA
    10%-20%
    senior levels
    delay)

    The event will probably Senior management attention


    Will occur once every 3 7-8 H High risk
    3 Moderate occur in some
    years
    20%-55% needed
    circumstances

    The event will probably


    Will occur once per
    Management responsibility must
    4 Likely occur in most 55%-90% 4-6 M Moderate risk
    year be specified
    circumstances

    The event is expected to


    Almost The event is expected 1-3 L Low risk Manage by routine procedures
    5 Certain
    occur in most
    to occur at any time
    90%-100%
    circumstances

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