Appendix D: Terminology

Terminology

This appendix summarises some risk analysis and management terminology used in the book. Reference is made to Aven (2011e), which discusses key terms based on the ISO standard on risk terminology (ISO 2009a,b).

1. Aleatory uncertainty
Variation of quantities in a population
2. Consequence
Outcome of an event

When referring to the consequences of an activity, a broader definition is adopted, covering all types of events and outcomes associated with the activity.
3. Event
Occurrence of a particular set of circumstances
4. Frequentist probability
A frequentist probability $b04-math-0001$ equals the fraction of times the event $b04-math-0002$ occurs when the situation considered can be repeated over and over again under similar conditions

A frequentist probability is a model concept, a parameter of a probability model.
5. Interested party
Person or group having an interest in the performance of an organisation

Examples are customers, owners, employees, suppliers, bankers, unions, partners or society.

A group may be an organisation, part of an organisation or more than one organisation.
6. Probability (subjective probability, knowledge-based probability or a judgmental probability)
A subjective measure of uncertainty of an event The probability is interpreted with reference to an uncertainty standard, for example, an urn: if the assessor assigns a probability of an event A equal to say 0.1, it means that the assessor compares his/her uncertainty (degree of belief) about the occurrence of the event $b04-math-0003$ with drawing at random a specific ball from an urn that contains 10 balls.
7. Risk
The two-dimensional combination of consequences (of the activity considered) and the associated uncertainties (what will be the consequences of the activity?)
8. Risk acceptance
A decision to accept the risk
9. Risk acceptance criterion
A reference by which risk is assessed to be acceptable or unacceptable
10. Risk analysis
Systematic use of information and knowledge to identify sources, identify their causes and consequences and describe risk

Risk analysis provides a basis for risk evaluation, risk treatment and risk acceptance. Information can include historical data, theoretical analysis, informed opinions and concerns of stakeholders.
11. Risk assessment
Overall process of risk analysis and risk evaluation
12. Risk criteria
Terms of reference against which the significance of the risk is assessed
13. Risk evaluation
Process of comparing risk against given risk criteria to determine the significance of the risk

Risk evaluation may be used to assist the decision-making process.
14. Risk management
Coordinated activities to direct and control an organisation with regard to risk

Risk management typically includes risk assessment, risk treatment, risk acceptance and risk communication.
15. Risk treatment
Process to modify risk
16. Source (risk source)
Element which alone or in combination has the intrinsic potential to give rise to a consequence

The “consequence” focused is typically an undesirable outcome. A source in a safety context could be a hazard and in a security context a threat.
17. Source identification
Process to find, list and characterise sources

In the safety literature, source identification is called hazard identification.
18. Stakeholder
Person or organisation that can be affected by, or perceive themselves to be affected by a decision or activity

A decision-maker can be stakeholder. The term “stakeholder” includes but has a broader meaning than “interested party”.
19. Uncertainty about something
Not knowing this something, where “something” refers to the true value of a quantity or the true future consequences of an activity
20. Uncertainty description
A measure of the uncertainty and associated background knowledge
21. Vulnerability
The two-dimensional combination of the consequences (of the activity considered) and associated uncertainties (what will be the consequences of the activity?) given an initiating event (or a risk source).

Terminology

D.1 Risk management: Relationships between key terms