Project stakeholders can often be risk averse with little to no knowledge of the risk process. How should a risk manager increase stakeholder risk appetite?

Question

Options

• AExclude risk averse stakeholders from future risk discussions
• BExplain risk handling and mitigation strategies
• CIncrease the impact of all risks in the risk breakdown structure (RBS)
• DDevelop a generous probabilistic cash flow model

• A
  10% (3)
• B
  71% (22)
• C
  3% (1)
• D
  16% (5)

Explanation

Risk aversion is often rooted in a lack of understanding about how risks are managed. By educating stakeholders on risk handling and mitigation strategies, the risk manager demonstrates that risks are identified, assessed, and actively controlled-not simply accepted. This builds confidence and can shift stakeholder attitude toward a higher risk appetite. Excluding stakeholders reduces engagement and violates good governance. Artificially increasing risk impact ratings misrepresents reality and could cause unnecessary alarm. Developing a cash flow model addresses financial modeling, not the root cause of stakeholder risk aversion.

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