Risk Threshold Framework
Once risks are identified and quantified, develop the framework in which the risks will be placed using the company’s risk tolerance internal benchmarks for the various risk thresholds — mainly the risk management department. Many events are routine and recurring. Others are unexpected, often having a low likelihood of occurrence but significant potential impact. Uncertainty, however, exists with respect to both expected and unexpected potential events, and each has the potential to affect strategy implementation and achievement of objectives.