In other words, actions that seek to mitigate the risk.Īs you can see from these examples, where risks are placed within the risk matrix depends greatly upon context. That’s why we need driver’s licenses, insurance, and seatbelts. For that reason, the overall risk is medium. If this is a major incident, the consequences would be far worse than either a papercut or a stomach upset. Then there is the possibility of a car accident. You might just be more careful to cook everything properly. Still, you’re unlikely to end up in hospital and the risk isn’t going to stop you from making your dinner. But since they won’t cause you any serious harm, the overall risk remains low – it’s not going to stop you from picking up that book, or from doing paperwork.įood poisoning might be less likely (unless, perhaps, cooking isn’t your forté), but the consequences could be more severe. Papercuts are certainly a possibility while turning the pages of your reading material. You might input these risks into the risk matrix as follows: Some risks from ordinary activities could be: There are plenty of risks we could face each day, many we don’t even think about. Imagine you are conducting a risk assessment for your day-to-day life. Let’s take a look at a risk matrix example.Īs you can see, the risk matrix is a fairly simple tool, although it can be made more complex depending on how you choose to use it within your organisation. How you label these categories is entirely up to you. Categories along the consequence axis could be called ‘very low’, ‘low’, ‘medium’, ‘high’, and ‘extreme’ or ‘catastrophic’. This traffic light system makes it easy to quickly understand levels of risk.ĭespite this basic structure, risk matrices can vary greatly depending on your organisation and how you use them.įor example, the likelihood axis can be divided into more specific categories such as ‘certain’, ‘likely’, ‘possible’, ‘unlikely’ and ‘rare’. If it is medium, it is shown in yellow or orange. A risk that has an overall low level of risk is colour-coded green. Within a risk matrix, levels of risk are further highlighted with a colour-coded system. Conversely, if the risk falls low on the likelihood scale and low on the consequence scale, the level of risk would be very low. If the risk is high on the likelihood scale and high on the consequence scale, you can define the level of risk as very high. The risks that your organisation could face are placed within the risk matrix depending on where they fall on this scale. Each axis follows a scale of very low to very high.
They are typically 5x5 grids that show the likelihood of risks occurring along the Y axis and the severity of their consequences along the X axis. Risk matrices all follow the same basic structure. In this blog, we explain what a risk matrix is in further depth, examine the pros and cons, and outline how you can create and use a risk matrix should you choose to use one.Ī risk matrix is a tool that can help you understand the risks your organisation faces, and their overall likelihood and severity, in a visual way.
For those working in risk management, as well those in senior positions, they provide an accessible overview of the risks an organisation faces, potentially making it easier to decide how risks should be dealt with. Although there are some limitations to risk matrices – in part because of their simplicity – there are numerous benefits. A risk matrix is a simple, visual tool that you can use to determine levels of risk.
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