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Complicated, subtle factors affect how we perceive risk and these can be exacerbated by the way we receive risk information. We refer to the ways we think about and react to risks as risk perception, and the processes for discussing risk as risk communication. Even when people are in the same or very similar situations, they may perceive the risks very differently. Similarly, different people listening to the same risk information will react to it differently depending on several factors that affect their perspective. The overall result of this is “the general frustration experienced by both risk managers and affected parties in conveying and understanding risk information”.[i] ...

In the simplest of terms, risk management helps you function in the real world. Organizations are under constant assault from both anticipated and unanticipated events which threaten to derail their plans. Risk management is what helps them understand, prepare for and react to these events. The largest firms will spend thousands of hours and billions of dollars on risk and compliance annually and there are dozens of different standards or methodologies to help guide the risk manager. But what do you do if you are a small organization and there is no money for training or consulting? Or if risk management is the second or third responsibility on your job description – the one you never quite get around to? ...

*Understanding is not the same as having information – it is the process of putting that information into context to work out what it means in a particular situation. We conduct a similar process on a larger scale during the ‘understand’ stage of the risk management process. During this time, we build on our knowledge of an organization to understand the risks it faces. * The term ‘understand’ is both an activity and a stage in our risk management process. As an activity, understanding means relating that information to a situation. Chess is often used as an illustration because I may know the names of the pieces on a chess board and what they can do, but I could still not understand chess. How the pieces interact, the set moves, strategies and how to apply these are all necessary to understand the game. Understanding can be achieved by asking the questions ‘why?’ or ‘so what?’ until you run out of questions. ...