What does the 'bow-tie diagram' illustrate in risk analysis?

The bow-tie diagram is a powerful tool used in risk analysis to visually represent the relationship between potential causes of risks, the risks themselves, and their consequences. It is structured in a way that resembles a bow tie, with the 'knot' in the center representing the event or risk in question. On one side, it outlines the various causes that could lead to this event, helping to identify vulnerabilities and triggers. On the other side, it illustrates the potential consequences that could arise if the event occurs, highlighting the impacts and severity of those outcomes.

This visual representation allows organizations to better understand and assess the risk landscape, ensuring that both prevention strategies (to mitigate causes) and response strategies (to manage consequences) are considered in risk management practices. By encompassing the full scope of risks, the bow-tie diagram serves as a comprehensive guide for stakeholders involved in risk assessment and management.

The other options do not capture the holistic view that the bow-tie diagram provides in risk analysis. While financial risks or legal obligations may be components of an organization's overall risk profile, they do not represent the fundamental purpose of the bow-tie diagram, which is focused on connecting causes and consequences in relation to specific risks. Similarly, workforce demographics, while relevant to some