2 Introduction
2.1 What is risk?
AS/NZS 4360 defines risk as, “the chance of something happening that will have an impact
upon objectives.” Risk may have a positive or negative effect, and is measured in terms
of consequences and likelihood.
Risk is inherent in everything we do. In general, we take a risk in order to benefit from an
opportunity. For example, a person may accept the risks related to riding a bike in order
to keep fit, or to win a race. A sport or recreation organisation may risk some of its funds
on new equipment in the hope that it will attract new members or improve performance in
competitions. When we consider opportunities, we weigh up the risks, look at the benefits
we might achieve, and make our decisions accordingly.
Perfect safety is unattainable, and even undesirable. If we decided to eliminate all risk we
would never drive a caravan on a gravel road, never run onto a rugby field, never undertake
business activities – in fact we might never get out of bed. Of course, choices like these
create other risks to our physical and emotional health.
There are three ways of looking at risk*:
Absolute risk – The overall risk inherent in a situation that has no controls present – the
worst thing that could happen if you didn’t do anything about a risk.
Residual risk – The level of risk remaining after risk treatment measures have been
taken – after you have decided to do something about a risk, there still may be a chance
that it will happen.
Perceived risk – An individual’s subjective assessment of the risk present at any time –
how risky you think the situation is.
Take jumping off a high bridge for example. The absolute risk is extreme – if you jump off
the bridge, it might be fun for a few seconds, but you will probably die. You can reduce the
risk by tying bungee cords to your ankles. If the bungee is secure and of the right length,
the residual risk is pretty minimal. Different individuals, however, may perceive quite
different levels of risk depending on their own personalities and experiences.
The concept of risk also covers “hazards.” Hazards are situations which give rise to risk.
For example, think of a fire hazard. The possibility of fire is the risk; a pile of paper near a
heater is a hazard.
See Appendix A for a glossary of definitions.