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What Is A Risk Assessment Matrix?

A Risk Assessment Matrix is a tool used by business owners to help them understand the risks they might face in their industry. This Matrix helps managers and executives weigh costs against potential benefits and then make strategic decisions that will benefit the company as a whole. A matrix can be completed for any company, no matter what industry.

What is a Risk Assessment Matrix?
The Matrix is a table that has two columns and four rows. The first column is labeled “Risk,” while the second column is labeled “Impact.” The four rows are labeled: Low, Medium, High, and Extreme. To complete this Matrix, you will need to know what risks your company faces and how those risks might impact your business. This information can be gathered through research or by talking with people familiar with the industry you are in.

Once you have all of the information collected, it’s time to fill out the Matrix. For each risk, your company faces, you will need to determine whether the risk is low, medium, high, or extreme. What will be impacted by this risk should also be selected, whether it is the company’s reputation, profits, employees’ safety, other people in business transactions with your company (customers), etc. Then, you determine what type of impact would occur if that risk were to come true based on how severe the consequences are for each level of potential harm caused by a given action or event.

We hope this information has been helpful to you.