- See also
- References
- External links
The residual risk is the amount of risk or danger associated with an action or event remaining after natural or inherent risks have been reduced by risk controls.[1]
One approach to scoring residual risk is to apply subjective judgement without applying any mathematical relationship between the inherent risk and the level of control effectiveness. A second method is to apply a mathematical approach.[2]
The general formula to calculate residual risk is
where the general concept of risk is (threats × vulnerability) or, alternatively, (severity × probability).
An example of residual risk is given by the use of automotive seat-belts. Installation and use of seat-belts reduces the overall severity and probability of injury in an automotive accident;[3] however, probability of injury remains when in use, that is, a remainder of residual risk.
In the economic context, residual means “the quantity left over at the end of a process; a remainder”[4]
In the property rights model it is the shareholder that holds the residual risk and therefore the residual profit.
See also
- Risk analysis
- Risk management
References
2. ^{{cite web|last1=Tattam|first1=David|title=The Scoring of Residual Risk|url=http://blog.protecht.com.au/the-scoring-of-residual-risk|website=Protecht Risk Management Insights|access-date=2017-05-01}}
3. ^{{cite web|title = Seat Belts: Get the Facts|url = https://www.cdc.gov/Motorvehiclesafety/seatbelts/facts.html|website = Motor Vehicle Safety|access-date = 2016-02-15|publisher = Centers for Disease Control|date = 20 August 2015}}
4. ^{{cite web | title = dictionary.com.}}
External links
- [https://web.archive.org/web/20160602084150/http://www.ohiocasualty-ins.com/omapps/ContentServer?c=cms_document&pagename=GoldenEagle%2Fcms_document%2FShowDoc&cid=1239994292235 Residual Risk ReductionTM]
- Economist.com
- Euronuclear.org
- R3i.org
- Syed Basit Sultan Bukhari
- Syed Bilgrami Imam
- Syed Darbar Ali Shah
- Syed Dilawer Hussain Ali
- Syed Essa Noori
- Syed Faizuddin
- Syed Fakhar Imam
- Syed Faqruddin Ali Ahmed
- Syed Farid al-Atas
- Syed Farid Alatas
- Syed Farid al-Attas
- Syed Farooq Rahman
- Syed Faruk Bin Syed Salim Alkaff
- Syed Fazaluddin
- Syed Fazl Ali
- Syed Fazlul Karim
- Syed Ghulam Murtaza Shah
- Syed Ghulam Nabi Fai
- Syed Ghulam Shah Abbasi al-Hashmi
- Syed Gulam Farooq Mirranay
- Syed Gulam Mustafa Shah
- Syed Gulamur Rahman Maizbhandari
- Syed Hafeezuddin
- Syed Hamid
- Syed Hamid Syed Jaafar Albar