PRINCE2 COMPONENTS - Risk Management

Risks are defined as the uncertainty of outcome (whether positive opportunity or negative threat).

The task is risk management is to manage the projects exposure to the risks and to manage the exposure by taking action to keep exposure to an acceptable level in a cost effective way.

Risk management involves having:

  • Access to reliable, up-to-date information about risks
  • Decision making processes supported by a framework of risk analysis and evaluation
  • Processes in place to monitor risks
  • The right balance of control in place to deal with those risks

The management of risk is one of the most important jobs done by the Project Board and Project Manager. The Project Manager is responsible for ensuring that risks are identified, recorded and reviewed regularly.

The Project Board has four responsibilities:

  • To notify the Project Manager of any external risks to the project.
  • Make decisions on the Project Managers recommendations to reactions to risk.
  • Strike a balance between the level of risk and potential benefits that the project may achieve.
  • Notify corporate/programme management of any risks that affect the projects ability to meet corporate or programme objectives.

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