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Website URL : http://www.swansea.gov.uk/index.cfm?articleid=38592

Risk Management Cycle - Risk Evaluation

There are two factors that determine how important a risk is - The chances of it happening (likelihood) and the cost or consequences if it does (impact).

Step 2 - Risk Evaluation looks at both of these factors.

Within the Council, a RAG (Red, Amber, Green) status is used to evaluate the likelihood and Impact factors and it is important to recognise that each RAG colour represents a particular meaning as follows:

Image depicting RAG Status

Many Council staff already use the RAG status on various templates as its very visual and easy to use. Time should be taken on each risk to think about it's likelihood and impact and what colour should be used to evaluate its status.

Assessing the level of risk against likelihood and impact enables the Council to identify which of the many risks deserve the greatest attention and resource.


When evaluating risk, there is a need to identify what is going to be put in place to stop the risk happening. This is called putting in countermeasures. Again, all countermeasures should be detailed in the relevant Risk Registers/Trackers.

Communication of risk is vital and all levels of management need to be kept informed of which risks are important and what the measures are.

Risk Proximity

When considering the risk's likelihood, another aspect that needs to be taken into account is the amount of time you have to stop the risk before it impacts the Council. This prediction is called the risk's proximity.

Some risks will be predicted to be further away than others and so attention should be focused on the more immediate ones first. NB: It is very important that the proximity of each risk is stated so dates can be continuously monitored.

Image depicting risk matrix

Risk Matrix

When evaluating the likelihood and impact of risks through meetings, workshops or as an individual, the risk matrix (inset) can be used to help plot the risks.

This is a simple mechanism to increase visibility of risks and assist management decision making. It is a graphical representation of information, found on a tab within the risk tracker template.

Risks should be plotted onto the matrix in terms of their impact and likelihood.

Happy to move forward?  Let's view Step 3 and 4...

Image depicting Move On
Image depicting Risk Management Montage

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