Abstract:Risk matrices communicate the likelihood and potential impact of risks and are often used to inform decision-making around risk mitigations. The merits and demerits of risk matrices in general have been discussed extensively, yet little attention has been paid to the potential influence of color in risk matrices on their users. We draw from fuzzytrace theory and hypothesize that when color is present, individuals are likely to place greater value on reducing risks that cross color boundaries (i.e., the boundar… Show more
“…They cautioned against “ dry ,” (i.e., stale) risk registers, the design or content of which changed infrequently, which in turn could encourage a “tick box” response. This is a useful insight given the large body of work that has critiqued risk matrices as a means of communicating risk for analysis, including their color, structure, and reliability (Cox, 2008; Cox et al., 2005; Levine, 2012; Monat & Doremus, 2020; Proto et al., 2023; Sutherland et al., 2021). Interviewees often linked the usefulness of registers with the effectiveness of risk communication processes: “I think you can mistake running a risk register for actually paying attention to and having the flow of information which leads you to understanding around any of those given risks” (ID 27).…”
Section: Resultsmentioning
confidence: 95%
“…They cautioned against "dry," (i.e., stale) risk registers, the design or content of which changed infrequently, which in turn could encourage a "tick box" response. This is a useful insight given the large body of work that has critiqued risk matrices as a means of communicating risk for analysis, including their color, structure, and reliability (Cox, 2008;Cox et al, 2005;Levine, 2012;Monat & Doremus, 2020;Proto et al, 2023;Sutherland et al, 2021).…”
Section: Objectsmentioning
confidence: 95%
“…Past research has situated the discipline of risk analysis within the varied practices and objects that comprise the management and governance of risk (Aven & Flage, 2020; Aven & Zio, 2014; Ring et al., 2016; SRA, 2017). “Practices” refers to the procedures and methods used to support the performance of risk management; while “objects” are understood as the products of these procedures and methods, such as a risk matrix or risk register (Cárdenas et al., 2014; Proto et al., 2023). Our paper contributes to the literature by exploring how these practices and objects influence the nature and outcomes of risk analysis in organizations.…”
Board directing is a continuous process of risk analysis and control in response to the duality of risk as threat and opportunity. Judgments are made and remade to simultaneously reduce the potential for damaging threats (e.g., fraud, reputation damage), while exploiting opportunities (e.g., new product development, mergers and acquisitions). Adopting an institutional logics approach, we explore this process of risk analysis and control through the varied subject identities (e.g., directorial roles), risk management practices (the procedures and tools used to identify, assess, and control risk), and risk objects (the product of risk identification, assessment, and control, e.g., a risk matrix or register) of boards. We argue that the contingent interaction between these identities, practices, and objects inform the “risk logic” of a board, which may draw attention to the notion of risk as threat, risk as opportunity, or both threat and opportunity. Using the testimony of 30 executive and nonexecutive directors that represent 62 companies from a range of public, private, and third‐sector organizations, we contribute to the literature on the microfoundations of risk analysis in organizations by shining a light on how board directors understand, assess, control, and ultimately govern risk in organizations.
“…They cautioned against “ dry ,” (i.e., stale) risk registers, the design or content of which changed infrequently, which in turn could encourage a “tick box” response. This is a useful insight given the large body of work that has critiqued risk matrices as a means of communicating risk for analysis, including their color, structure, and reliability (Cox, 2008; Cox et al., 2005; Levine, 2012; Monat & Doremus, 2020; Proto et al., 2023; Sutherland et al., 2021). Interviewees often linked the usefulness of registers with the effectiveness of risk communication processes: “I think you can mistake running a risk register for actually paying attention to and having the flow of information which leads you to understanding around any of those given risks” (ID 27).…”
Section: Resultsmentioning
confidence: 95%
“…They cautioned against "dry," (i.e., stale) risk registers, the design or content of which changed infrequently, which in turn could encourage a "tick box" response. This is a useful insight given the large body of work that has critiqued risk matrices as a means of communicating risk for analysis, including their color, structure, and reliability (Cox, 2008;Cox et al, 2005;Levine, 2012;Monat & Doremus, 2020;Proto et al, 2023;Sutherland et al, 2021).…”
Section: Objectsmentioning
confidence: 95%
“…Past research has situated the discipline of risk analysis within the varied practices and objects that comprise the management and governance of risk (Aven & Flage, 2020; Aven & Zio, 2014; Ring et al., 2016; SRA, 2017). “Practices” refers to the procedures and methods used to support the performance of risk management; while “objects” are understood as the products of these procedures and methods, such as a risk matrix or risk register (Cárdenas et al., 2014; Proto et al., 2023). Our paper contributes to the literature by exploring how these practices and objects influence the nature and outcomes of risk analysis in organizations.…”
Board directing is a continuous process of risk analysis and control in response to the duality of risk as threat and opportunity. Judgments are made and remade to simultaneously reduce the potential for damaging threats (e.g., fraud, reputation damage), while exploiting opportunities (e.g., new product development, mergers and acquisitions). Adopting an institutional logics approach, we explore this process of risk analysis and control through the varied subject identities (e.g., directorial roles), risk management practices (the procedures and tools used to identify, assess, and control risk), and risk objects (the product of risk identification, assessment, and control, e.g., a risk matrix or register) of boards. We argue that the contingent interaction between these identities, practices, and objects inform the “risk logic” of a board, which may draw attention to the notion of risk as threat, risk as opportunity, or both threat and opportunity. Using the testimony of 30 executive and nonexecutive directors that represent 62 companies from a range of public, private, and third‐sector organizations, we contribute to the literature on the microfoundations of risk analysis in organizations by shining a light on how board directors understand, assess, control, and ultimately govern risk in organizations.
“…It seems that the coloring of the matrix cells has, in part, some effect upon users. Risk reduction actions moving from red cells were preferred even though other actions might have produced greater risk reduction 11 . Thus, as an accurate nomographic device for risk management, a colored RM poses unwanted distractions.…”
A review of historic mathematical, risk, and engineering science information was conducted to find the roots of the risk matrix. The objective was to locate and evaluate information surrounding its use. A three‐tiered (low, medium, high) system is historical, if not biologically programmed into human physiology. The Risk Matrix is a Likert preference system that has migrated into engineering and science. No testing or mathematical foundation was found.
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