Residual Risk

Residual risk refers to the level of risk that remains after risk mitigation strategies have been implemented. It represents the potential impact and likelihood of an event occurring even after preventive measures have been taken.

For a more detailed explanation and visual representation, visiting the TrustRegister documentation directly would be beneficial.

It is a key measure of risk before or after treatment or mitigation efforts have been applied. It indicates how much progress has been made towards reducing the risk an organization faces. 

Example of Residual risk

Imagine you’re planning a picnic in the park. The inherent risk here is the chance of it raining, which would naturally ruin the outdoor event. This risk exists simply because of the unpredictable nature of weather, before you even think about checking the forecast or planning a backup indoor location. It’s a basic, unmanaged risk that comes with the decision to have an outdoor event.

Continuing with the picnic example, after implementing measures like checking the weather forecast and setting up a tent to mitigate the risk of rain, residual risk is what remains. Even with these precautions, there’s still a small chance of rain that could disrupt the picnic. This remaining risk, despite your best efforts to control it, is the residual risk. It represents the uncertainty that persists after all preventive measures have been taken

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