CIVL4170-2025-S1-Week01-Lecture 2 - what is risk and why is it important - lectures slides

Course Overview

• Course Title: CIVL4170: Risk Analysis in Civil Engineering

• Lecture: Lecture 2: What is risk and why is it important?

• Instructors: A/Prof Ilje Pikaar and Prof. William Clarke

• Semester Info: Week 1 - Semester 1, 2025

Lecture Structure

• Discussion Topics:

  • Definition of risk and types of significant risks (15 min)

  • Essentials of risk management for effective professional practice (20 min)

  • Assessment of existing knowledge and identification of knowledge gaps (15 min)

Defining Risk

Understanding Risk

• Definition: Risk is the effect of uncertainty on objectives (according to AS ISO 31000:2018 - Risk Management Guidelines).

  • Effect: Deviation from the expected, which can be positive or negative.

  • Objectives: Vary in aspects such as financial, health, safety, and environmental, applicable at different levels (strategic, organization-wide, project, product, process).

  • Uncertainty: A state of lack of information or knowledge concerning an event and its potential consequences or likelihood.

Characterizing Risk

• Risk Characteristics:

  • Often described in terms of potential events and their consequences, combined with likelihood of occurrence.

  • Expressed as a combination of the predicted severity of consequences and probability of the event.

Importance of Risk Management

• Essential Knowledge for Graduate Engineers:

  • Collaborate in groups to conceptualize what is necessary for successful risk management.

  • Develop a coherent representation/model for presentation.

Identifying Knowledge Gaps

• Self-Assessment:

  • Reflect on existing knowledge about risk and identify main gaps.

Course Scope

Key Areas of Focus

• Risk Management Objectives:

  • Stakeholder & Reputation Risk Management

  • Sustainable Operational Excellence

  • Professional Practice

  • Safety & Health

  • Environmental Impacts

  • Supply Chains

  • Financial Performance

  • Projects/Contractors

  • Cybersecurity

  • Social Impacts

Main Activities

• Key Activities in Risk Management:

  • Identify, assess, and treat risks.

  • Monitor and review risk management processes.

Types of Knowledge

Aristotle's Insight

• Practical Wisdom: Knowledge of what is right or best for specific circumstances, pivotal in making informed decisions.

  • Professional Practice Definition: Making decisions amidst incomplete knowledge and managing uncertainties effectively, crucial to professionalism.

• Goal: Enhance understanding of risk in civil engineering and ability to utilize risk management tools to resolve related challenges.

Lecture Summary

1. Risk Definition: "Effect of uncertainty on objectives" (different priorities for different stakeholders).

2. Risk Dimensions: Includes both downside threats and upside opportunities; proactive addressing of both is crucial.

3. Two Key Dimensions: Risk involves understanding probability (frequency) and impact (consequence).

4. Zero Risk Concept: Achieving zero risk is impossible; risk-taking is necessary, but should be proportional to expected return.

5. Perception of Risk: Understanding risk is subjective, influenced by personal perceptions of uncertainty and significance.

6. Relevance to Career: Risk identification and management is integral to engineering practice across design, construction, and operational phases.

Conclusion

• Solid understanding of risk is essential for a successful career in engineering, reinforcing the need to engage with and study these concepts.