In risk management, what is the first step in addressing a risk?

In risk management, what is the first step in addressing a risk?

• A. Risk mitigation planning
• B. Hazard identification to determine potential risk sources
• C. Risk monitoring
• D. Risk acceptance

Answer: (B)

Identifying hazards and potential risk sources is the first step because you must know what could go wrong before you can assess, prioritize, or treat anything. Without spotting the hazards, there’s no basis to evaluate likelihood or impact, which means you can’t determine which risks need controls or how to design them. Once hazards are identified, you analyze the risks to decide where to focus mitigation efforts, then plan and implement the appropriate controls. Monitoring comes after the controls are in place to ensure they’re effective and to catch new risks, while risk acceptance is a decision you make only after evaluating residual risk.

Identifying hazards and potential risk sources is the first step because you must know what could go wrong before you can assess, prioritize, or treat anything. Without spotting the hazards, there’s no basis to evaluate likelihood or impact, which means you can’t determine which risks need controls or how to design them. Once hazards are identified, you analyze the risks to decide where to focus mitigation efforts, then plan and implement the appropriate controls. Monitoring comes after the controls are in place to ensure they’re effective and to catch new risks, while risk acceptance is a decision you make only after evaluating residual risk.