How a threat can lead to loss: follow the event pathway

A threat, an event and a loss describe different parts of a risk scenario. Keeping them separate helps people explain what might happen and where action could change the outcome.

The diagram illustrates a pathway: a threat can produce loss through an event. It is a simplified model of a possible connection, not a calculation or a prediction that every threat will lead to harm.

Distinguish the three elements

In RMBOK’s working terminology, a threat combines a source and a hazard representing a credible risk. An event is an occurrence or change in circumstances that can affect objectives. A loss is an adverse consequence, such as damage, disruption or failure to achieve an objective.

Different disciplines use these terms in different ways. Agree how they are being used in your assessment before combining information from several teams.

Follow a plausible example

Consider a fictional facility exposed to severe weather. High winds may threaten its operations. Damage to a building could be an event that interrupts access to the workspace. Lost operating time and delayed service could then affect the organisation’s objectives.

The assessment needs to establish the relevant conditions, the people and resources exposed, and the evidence for the proposed pathway. Naming a severe-weather threat alone does not establish the likelihood or scale of a loss.

Ask where controls can change the pathway

Some measures act on the likelihood of an event. Others limit what follows. A control may need to be prepared well before the event even when its main function is to manage the consequences.

For each measure, explain its purpose, who is responsible and what evidence shows it works. Consider dependencies and weaknesses that could affect several safeguards together.

Turn the diagram into a useful risk discussion

• Whose objective could be affected?

• What makes the threat credible in these conditions?

• What specific event connects the threat to the possible loss?

• What evidence supports that connection, and what remains uncertain?

• Which controls act on the pathway, and what decision is needed next?

The aim is a defensible explanation that supports action. A threat label or an attractive diagram cannot replace the evidence, assumptions and judgement required for the actual situation.

Adapted from the glossary in Risk Management Body of Knowledge, by Julian Talbot, Jason Brown and Miles Jakeman, AM. The severe-weather example is fictional.

Put the body of knowledge to work

Explore the Risk Management Body of Knowledge for the connected principles, frameworks and methods behind this article.

Considering a shared reference for your team? Enquire about organisational use and tell us how you would use RMBOK.