Monitoring Other Risks The other risks that have been identified as ‘Risks of Concern’ are put on a monitor watch, to be reassessed every three months. The likelihood of each of these scenarios is reviewed on a routine basis. If the assessment suggests that either the likelihood of these risks occurring has increased, or the consequences if they were to occur would be more severe than originally assessed, and these changes are sufficiently large to put them over the defined tolerance level to constitute a ‘strategic risk’, then these risks are flagged for mitigation action and management are asked to review the options for intervention. Figure 17 illustrates how the effects of management action are estimated to be able to reduce the strategic and catastrophic risks identified by the analysis, and bring them down below the risk tolerance thresholds mandated by senior management.
Figure 17: Effects of risk mitigation measures in reducing the loss levels and likelihoods of scenarios of concern
Source: Cambridge Centre for Risk Studies; Data from simulation of consumer sector companies in the FTSE 100.
Risk Management for the Consumer Sectors
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Cambridge Case Study Series
