What term refers to the amount of uncertainty that remains after all risk management efforts have been exhausted?

Residual risk is the term that signifies the amount of uncertainty that remains after all risk management strategies and efforts have been applied. In risk management, organizations take various steps to identify, assess, and mitigate risks associated with their operations. Despite these efforts, it is inevitable that some level of risk will remain due to factors such as incomplete information, inherent uncertainties in the environment, or limitations in the effectiveness of risk management measures. This leftover risk is what we refer to as residual risk.

Understanding this concept is crucial for organizations because it helps to focus on those areas that require ongoing monitoring and may need additional strategies for improvement. It emphasizes the need for an organization to accept that complete elimination of risk is impossible and to prepare for potential impacts of remaining risks through contingency planning or other means.