The concept of inherent risk is occasionally mentioned by information security and information risk practitioners. Inherent risk is difficult to conceptualize, and an even more difficult idea to apply in practice.
The typical equation is: inherent risk + controls = residual risk.
It is easy to mask poor models when they are applied in theoretical fields such as information security and information risk assessment. The problem with these approaches can be illustrated by attempting to apply them to examples that have a physical reality. Here is one:
A city-dweller is considering going to a grocery store 10 blocks away, and whether to get there by walking, bicycling, driving or public transportation. As he considers his options, he decides to determine the inherent risk of staying home, and the inherent risk of each of the transportation options. He considers each choice as if conducted with eyes closed and ears plugged and with an ignorance of the neighborhood, vehicular traffic laws and physics. He will pretend to have no knowledge of the local culture around pedestrians or cyclists and pretend not to feel curbs as he stumbles over them. He will imagine that no one will adjust their behavior upon encountering him; that no one will act to protect him; that most vehicles in cities have low profiles, travel at low speeds and have few catastrophic consequences when impacting a person; that vehicles will likely only be present on streets and not sidewalks; that building facades won't come loose and fracture his skull; that he won't get hit by lighting by virtue of being outside; and so on. These considerations might seem ridiculous, but all of them, and a nearly infinite number more, must be eliminated to arrive at inherent risk. If even one is left in, it's no longer inherent risk.
On top of that conundrum, the process requires that “controls” are added back into the equation. So, once “inherent risk” is determined, the next step is to add back traffic laws, citizen good will, building codes, a possible use of seat belts or helmets, pedestrian crossings, a general sense that thunder implies rain and a likely seeking of shelter, general awareness and competence, and so on.
How does one even begin to calculate "inherent risk"? Is this how people think about risk? Clearly not. Is this type of calculation even feasible? Not really. (We haven't even considered benefits, which are addressed in this blog in the post on risk matrixes.) The concept of inherent risk has been conspicuously absent from security and risk standards and methods. Most experienced practitioners long ago dropped it from their approaches. The attempt to address inherent risk confuses and complicates the fields of risk assessment and risk management, adding little value in the process. It's reasonable to expect that inherent risk no longer be promoted or used. Yet, within the last year, I have become aware of initiatives in risk assessment and modeling which include, and are dependent upon, the definition and determination of inherent risk. The stories of these initiatives were painful to hear. It was even more painful to find out that the idea was being promoted by a group believed to be expert in the field of information security management programs.
To be clear: aside from situations in which inherent risk is rigorously determined as the best approach, it should not be used by information security and information risk practitioners. If they insist on using the constructs of inherent risk, practitioners will have a Sisyphean task ahead of them.