What does the term ‘residual risk’ signify?

The term 'residual risk' signifies the risk that remains after security controls have been put in place to mitigate identified risks. In risk management, it's crucial to understand that no security measure can provide complete protection; therefore, some level of risk will always be present, even after implementing various controls. This remaining risk represents the potential impact of threats that still exist due to factors such as the effectiveness of the controls, the evolving threat landscape, and the dynamic nature of risks within an organization.

Identifying and assessing residual risk is essential for organizations, particularly in the context of DoD security programs, as it helps in making informed decisions about whether to accept, mitigate, or further transfer that risk. Understanding residual risk enables organizations to maintain a balanced and realistic view of their risk posture, ensuring that they allocate appropriate resources to manage threats effectively while acknowledging that some risk will persist.