Residual_Risk

 Residual_Risk :-

is the amount of risk that remains after all feasible risk reduction measures (controls) have been implemented, acknowledging that some risk is unavoidable. 

It's the leftover exposure after addressing inherent risks, representing what's left after you've done your best to mitigate threats, like the slight chance a child could still access medication despite child-proof caps. 

Managing residual risk involves setting acceptable tolerance levels and continuously monitoring it, as the goal of risk management is to reduce it to an acceptable or tolerable level, not eliminate it entirely. 

Key Concepts :-

- Inherent Risk: 

The initial level of risk before any controls are applied.

Controls: Actions, policies, or systems put in place to reduce risk (e.g., safety caps, security protocols, training).

Residual Risk: The risk that persists after controls are applied. 

Examples :-

Cybersecurity: 

Even with strong firewalls, a clever phishing attack might still succeed, leaving a residual risk.

Health & Safety: 

Wearing seatbelts reduces accident risk, but the risk of injury in a crash isn't zero, so residual risk remains.

Project Management: 

A project might have controls for budget overruns, but unexpected delays (residual risk) can still occur. 

Formula :-

A simple way to think about it is:

Residual Risk = Inherent Risk - Impact of Risk Controls. 

Management Organizations aim to reduce residual risk to a level within their risk appetite (what they're willing to accept) by applying measures like safety nets, emergency plans, or risk transfer (insurance).