Risk analysis, by Terje Aven, Chichester, John Wiley & Sons, 2008, x + 194 pp., £50.00 or US$100 (hardback), ISBN 9780470517369
This book provides accessible and concise guidance to the process of planning, execution and use of risk analysis in the context of risk management, with minimal prior knowledge required. Its first half deals with the understanding of risk and risk analysis, as well as the treatment of risk within an organisation, including chapters on the planning, risk assessment and risk treatment phases. It also briefly introduces a number of well-known risk analysis methods such as failure mode and effect analysis, fault tree analysis and simulation. The second half provides many real-life examples from a variety of fields. These are used to stress the points made in the first part, and show how the analysis process and risk analysis methods can be used in practical situations, with ample discussion of their benefits, limitations and pitfalls.
The book defines risk analysis as ‘the systematic use of information to identify hazards, threats and opportunities, as well as their causes and consequences, and then express risk’. Throughout the text, the author successfully argues that those analysing risk need to understand both the fundamental concepts of risk analysis and the domain it is applied to. Furthermore, analysts need to be able to apply a variety of methods and techniques that go beyond the mere use of mathematical tools. He demonstrates that incomplete knowledge of the threats at work, or of the barriers that might prevent undesirable consequences, introduces uncertainties that significantly limit the value of mathematical techniques. The subtitle of the book Assessing Uncertainties Beyond Expected Values and Probabilities should be understood in this light: while one might be tempted to think it advocates the use of advanced statistical analysis techniques, it in fact refers to the broad, holistic view that should be taken to gain optimal insight into risks. This book hardly requires any background in mathematics at all, although a basic knowledge of probability theory and statistics might be beneficial at some points. While the book claims to be written mainly for professionals in the risk analysis and risk management fields, the accessibility of the material ensures that it can also provide valuable insights to those in the management of the organisations they work for. For the mathematically proficient, the information in this book is still relevant, but readers of this journal are warned that this is not a math book, as it portraits risk analysis to be at least as much of an art as a science.