ERM and Performance

Question 1

Who identifies risk?

Answer 1

Usually there is a individual or team who identifies risk

Question 2

When do you identify risk?

Answer 2

Ongoing process (budgeting, planning and reviews)

Question 3

What are methods of risk identify?

Answer 3

Cognitive computing

Data tracking and external sources

Interviews and surveys

Key risk indicators

Process analysis

Workshops

Surfacing Assumptions

Question 4

In your risk statement, do you want to discuss root causes?

Answer 4

That is not desirable. You don’t want to have the cause or source unspecified.

Question 5

What is the prospect theory?

Answer 5

Losses more consequential than gains

Framing (gain vs loss) influences assessment

Example: Risk framed as gain (i.e. getting a sure thing vs likelihood of getting money), pick the sure thing (risk-averse choice)

Question 6

T/F: Risks at higher levels are more likely to influence overall reputation? (Severity)

Answer 6

TRUE

Risk can have different effects at different levels of the organization

Question 7

Risk assessments may be in words or numbers?

Answer 7

TRUE

Question 8

Risk assessment should be on the same continuum of strategy and business objectives?

Answer 8

TRUE

Question 9

T/F: Risk with similar severity may receive differing priorities?

Answer 9

TRUE

Question 10

T/F: Different risk priorities may be assigned to different levels?

Answer 10

TRUE

Question 11

What are acceptable risk response categories?

Answer 11

1) Accept
2) Avoid
3) Pursue- Increase the risk
4) Reduce- Decrease the risk
5) Share risk- Insurance or hedging strategies

Make sure you’re operating in your risk appetite and below capacity

Question 12

What is the four levels of integration?

Answer 12

1) Minimal integration- The risk View
2) Limited Integration- Risk category View
3) Partial Integration- Risk Profile View
4) Full Integration View- Portfolio View