Monitoring and Reviewing Business Risk Exposure

It is important that organizations monitor their business risk exposure.

It is not yet an "auditable science" and the figures derived will vary due to:

• Changes in the assumptions used in determining the indirect ancillary costs of failure
• The accuracy of our probability of failure predictions.

We are not even sure of the significant of level of risk exposure (the level) at which the organization is in trouble.

But it does help the organization assess the change in risk exposure that is taking place over time, the trends relative to previous years.

In future years when these predictions are assessed together with the written down (depreciated) value of assets we believe they will constitute a value management indicator.

This indicator can be related to the future renewal and maintenance programs and assessments of future risk exposure levels can be made (based on the assumptions made).

We believe that this indicator will be one of the key future indicators on organizational business health.

The following figure shows the trend type analysis outlined above.