How do you Calculate Risk Ranges?
To calculate a Division risk range you need to carry out the following steps:
Review all data responses in a Division category (conducted from the Manage Data page).
Note the lowest possible score for each data input and sum the total for each Division category.
Note the highest possible score for each data input and sum the total for each Division category.
The lowest sum of each Division will go in the righthand box of the Very Low range.
The highest sum of each Division will go in the righthand box of the Very High range.
Once the lowest and highest range for each Division is determined, you can then complete the remaining range inputs across the Divisions.
Each of these steps are further explained below:
STEP 1
To review the scores you should go to the Manage Data tab and scroll down to the Table.
From there click on the ‘Edit’ icon for each data input -
After clicking on the Edit icon, the data input will populate at the top of the screen and display each of the score responses -
STEP 2 & 3
In Division categories, note the lowest score and the highest score for each data input.
In Division categories, sum the total of the low and high scores.
Keep a separate record of this in a work notepad
An example table is provided below:
STEP 4 & 5
The sum of low scores for each Division is placed in the righthand box of the Very Low range.
The sum of high scores for each Division is placed in the righthand box of the Very High range.
STEP 6
Once the lowest and highest possible scores are known for each Division, setting the remaining ranges provides flexibility.
Below are three Risk Matrices that provide different configurations of ranges.
The first can be described as a moderate risk appetite. The Ranges are evenly distributed.
Using the same VL and VH ranges, here is an example of a matrix with low risk appetite. A low risk appetite means there is less tolerance for risk. This matrix type will result in a greater number of customers rating as higher risk.
Using the same VL and VH ranges, here is an example of a matrix showing a high risk appetite. A high risk appetite means there is greater acceptance to risk. A business operating with a higher risk appetite is expected to have robust controls in place for ongoing monitoring.
