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RISK MANAGEMENT TERMINOLOGY
2.1 Horizontal Perspective
One of the key aims of the Working Group on Risk Management1 was to explore horizontal aspects of risk management in government, i.e., elements of risk and procedures for dealing with risk which are common to various government policy responsibilities. Accordingly, in this report, risk management refers to the process for dealing with uncertainty within a public policy environment.2
As a discipline, risk management has existed for a long time and has applications in numerous sectors (e.g. financial, transportation safety, health and environmental protection), and consequently there are many variations in the nomenclature. Over time, significant effort has been expended by agencies, scientists and standards organizations to develop clear definitions of the sometimes philosophical and sometimes scientific concepts surrounding risk, its measurement and management.
Through a review of such efforts, and the various models used in different sectors to describe risk management, it became evident that regardless of the labels applied in different sectors, significant commonalities exist in terms of the process for dealing with risk in the various models.
Accordingly, while it was determined that a common understanding of key terms would be necessary to pursue a horizontal perspective, it was also agreed that the use of accessible, rather than specific, technical language would best advance the development of a platform for the discussion of public risk management.
2.2 Key Terms
The following definitions of key terms were agreed upon by the Working Group:
A function of the probability (chance, likelihood) of an adverse or unwanted event, and the severity or magnitude of the consequences of that event.
A source of harm or action (situation) which is known to, or has the potential of, causing an adverse effect.
The identification, recognition or definition of potential agents or scenarios capable of, or known to cause, adverse effects or events.
The interactive (two way) exchange of information and opinions on risk and risk-related factors (including the existence, nature, form, severity, or acceptability of risk and how they should be managed) among risk assessors, risk managers, consumers and other interested parties (stakeholders) in order to achieve a better understanding of risk, risk management, risk-related issues and decisions.
2.3 Contextual Concepts
In addition to the key terms outlined above, there are several important contextual aspects to bear in mind when considering risk in public policy decision-making:
1 See Annex B for background on the Working Group.
2 It should be noted that this is a general definition and while it includes the assessment of risk as a function of the decision-making process, it is not intended to prescribe a system for prioritizing specific risks.
Also of note is that in many international fora, risk analysis is used as the more comprehensive label, referring to an overall process for dealing with risk, including identification, assessment and implementation of measures. The use of management rather than analysis in this report is intended to reflect the general applicability of the concepts to be developed, not only in technical or science-based sectors, but also in other public policy areas.
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