New definition of risk under ISO 31000 and 31010 is:

The official definition of risk in ISO 31000:2018 is the "effect of uncertainty on objectives." While none of the options provided are a verbatim match, option D is the closest and most appropriate description. It correctly captures the essential components of the ISO definition: the link between an uncertain event (expressed as "probability of an event") and its consequences ("impact") in relation to an organization's goals ("objectives"). This focus on objectives is the cornerstone of the ISO 31000 approach, distinguishing it from older, more limited definitions that focus solely on negative outcomes or specific domains like finance or insurance.

A. This is a traditional, narrow definition focusing only on negative consequences. ISO 31000 defines "effect" as a deviation from the expected, which can be positive (opportunity), negative (threat), or both.

B. This definition is too specific to the financial sector. The ISO 31000 standard is generic and designed to be applicable to any organization, activity, or sector, not just investment.

C. This is a highly specialized definition from the insurance industry. ISO 31000 provides a universal framework for risk management that extends far beyond insurable losses.

1. International Organization for Standardization (ISO). (2018). ISO 31000:2018 Risk management — Guidelines.

Section 3.1: Explicitly defines risk as the "effect of uncertainty on objectives." The notes further clarify that "An effect is a deviation from the expected — positive

negative or both" and "Objectives can have different aspects and categories

and can be applied at different levels." This supports why options A

B

and C are too narrow and why D

by linking impact to objectives

is the best choice.

2. Purdy

G. (2010). ISO 31000:2009—Setting a New Standard for Risk Management. Risk Analysis

30(6)

881-886.

Page 882: The article discusses the definition of risk in the standard as "the effect of uncertainty on objectives." It emphasizes that this definition is a significant departure from previous ones by being neutral (not just negative) and by directly linking risk to the organization's objectives

which aligns with the reasoning for selecting option D. (DOI: https://doi.org/10.1111/j.1539-6924.2010.01442.x)

3. Leitch

M. (2010). ISO 31000:2009—The new international standard on risk management. Risk Analysis

30(6)

887-892.

Page 888: This paper highlights that the definition "effect of uncertainty on objectives" is a "keystone of the Standard." It explains that risk only exists in the context of objectives

reinforcing that any valid description of risk

like option D

must include this linkage. (DOI: https://doi.org/10.1111/j.1539-6924.2010.01441.x)