What does establishing your own scales in risk analysis help to mitigate?

Establishing your own scales in risk analysis is vital for addressing bias from management. When organizations use standardized or externally defined scales, there may be inherent biases influenced by management perspectives or corporate culture. By developing their own scales, organizations can set criteria that reflect their specific context, values, and risk appetite. This practice encourages a more objective assessment of risks and helps to ensure that the analysis more accurately represents the realities of the organization rather than being swayed by management's subjective preferences or the prevailing corporate narrative.

This customized approach can also promote transparency and consistency in risk evaluations, leading to more reliable decision-making processes. Having a well-defined and contextually relevant scale assists in balancing different viewpoints within the organization and facilitating constructive discussions around risk.