Document Type: Framework
Status: Canon
Version: v1.0
Authority: Risk Brain
Applies To: All Brains
Parent: Risk Brain Canon
Last Reviewed: 2026-04-15
Purpose
Risk Classification Framework defines how MWMS evaluates the severity of structural risks.
Risk severity must be assessed consistently across:
traffic risk
platform risk
supplier risk
execution risk
capital risk
data risk
operational risk
Without structured classification, risk perception becomes subjective and inconsistent.
This framework standardises how risk is evaluated so escalation decisions remain stable.
Scope
This framework applies to:
dependency risk evaluation
concentration risk evaluation
volatility exposure evaluation
operational fragility evaluation
platform exposure evaluation
data integrity exposure evaluation
scaling instability evaluation
This framework governs how risk severity is scored.
It does not govern:
mitigation strategy selection
capital allocation decisions
execution adjustments
experiment design changes
Those remain governed by:
HeadOffice
Finance Brain
Experimentation Brain
Operational Brains
Core Principle
Risk severity must reflect structural exposure, not emotional concern.
Risk must be evaluated across multiple dimensions.
Single-factor risk scoring produces distorted decision signals.
Risk must consider:
probability of occurrence
impact severity
detection difficulty
recovery difficulty
time sensitivity
Risk scoring must remain comparable across different risk types.
Risk Scoring Model
Each Risk_ID must be evaluated across 5 dimensions.
Probability Level
likelihood risk event will occur.
Scale:
1 very unlikely
2 unlikely
3 possible
4 likely
5 highly likely
Impact Severity
degree of system disruption if risk materialises.
Scale:
1 minimal disruption
2 manageable disruption
3 moderate disruption
4 serious disruption
5 critical disruption
Detection Difficulty
difficulty of identifying risk before impact occurs.
Scale:
1 immediately visible
2 easily detectable
3 moderately detectable
4 difficult to detect
5 hidden until impact
Recovery Difficulty
difficulty of restoring system stability after impact.
Scale:
1 easy recovery
2 manageable recovery
3 moderate recovery effort
4 difficult recovery
5 structural damage likely
Time Sensitivity
speed at which risk impact may occur.
Scale:
1 slow developing
2 gradual
3 moderate speed
4 rapid
5 immediate
Risk Score Formula
Risk Score =
Probability
× Impact
× Detection Difficulty
× Recovery Difficulty
× Time Sensitivity
Higher scores indicate higher structural risk exposure.
Risk Score provides comparative ranking across risk categories.
Risk Severity Bands
Low Risk
Score range: 1–100
Monitor only.
Moderate Risk
Score range: 101–300
Review required.
Elevated Risk
Score range: 301–600
Mitigation planning recommended.
High Risk
Score range: 601–900
Mitigation planning required.
Critical Risk
Score range: 901+
Immediate escalation required.
Classification Categories
Risk must be assigned to at least one category.
Dependency Risk
system reliance on single external component.
Examples:
single traffic platform
single payment processor
single affiliate network
Concentration Risk
over-reliance on single:
audience
offer
supplier
traffic source
Volatility Risk
exposure to unpredictable performance variation.
Examples:
high CPC volatility
platform policy instability
unstable traffic sources
Fragility Risk
systems that fail easily under stress.
Examples:
complex funnel dependencies
single point failure tools
Data Risk
unreliable measurement conditions.
Examples:
tracking inconsistency
attribution distortion
Scaling Risk
risk increases as scale increases.
Examples:
CPA inflation sensitivity
supply limitation
Risk Interpretation Rules
High probability low impact risks may not require escalation.
Low probability high impact risks require monitoring.
Hidden risks require increased priority due to detection difficulty.
Fast-developing risks require faster review cycles.
Risk classification must consider compound effects.
Multiple moderate risks may combine into structural instability.
Relationship to Other Frameworks
Risk Escalation Framework
defines when risk must be acted upon.
Dependency Exposure Framework
identifies concentration risk patterns.
Finance Brain Stability Signal Framework
monitors capital volatility risk.
Experimentation Brain Evidence Hierarchy
monitors statistical confidence risk.
SIT Drift Detection Framework
monitors structural drift risk.
Drift Protection
The system must prevent:
risk being evaluated emotionally
risk being ignored due to strong performance periods
risk being underestimated due to familiarity bias
risk severity being inflated without evidence
risk scoring being inconsistent across Brains
Risk classification must remain consistent.
Architectural Intent
Risk classification converts uncertainty into structured visibility.
Structured visibility improves decision stability.
Decision stability improves scaling durability.
Risk classification allows MWMS to expand without hidden fragility.
Change Log
Version: v1.0
Date: 2026-04-15
Author: HeadOffice
Change:
Initial creation of Risk Brain Risk Classification Framework defining multi-factor risk scoring model for structural exposure evaluation across MWMS.
END RISK BRAIN RISK CLASSIFICATION FRAMEWORK v1.0