‼️ [Workplace] Risk Management

Question 1

A high-level characterization of the amount of uncertainty (acceptable risk) an organization is willing to pursue or to accept to attain its risk management goals.

Answer 1

Risk Appetite

Question 2

Situation in which a person or organization may benefit from undue influence due to involvement in outside activities, relationships, or investments that conflict with or have an impact on the employment relationship or its outcomes.

Answer 2

Conflict of Interest

Question 3

Situation in which one party engages in risky behavior knowing that it is protected against the risk because another party will incur any resulting loss.

Answer 3

Moral Hazard

Question 4

Uncertainty that has an effect on an objective, where outcomes may include opportunities, losses, and threats.

Answer 4

Risk

Question 5

Situation in which an agent (for example, an employee) makes decisions for a principal (for example, an employer) potentially on the basis of personal incentives that may not be aligned with the principal’s incentives.

Answer 5

principal-agent problem

Question 6

Action taken to manage a risk.

Answer 6

Risk Control

Question 7

Tool used to gather individual assessments of various characteristics of risk (for example, frequency of occurrence; degree of impact, loss, or gain for the organization; degree of efficacy of current controls).

Answer 7

Risk scorecard

Question 8

Metrics that provide an early signal of increasing risk exposures for an enterprise.

Answer 8

Key Risk Indicators (KRI)

Question 9

Principle that organizations should take all steps that are reasonably possible to ensure the health, safety, and well-being of employees and protect them from foreseeable injury.

Answer 9

Duty of care

Question 10

Protocol that an organization implements when an identified risk event occurs.

Answer 10

Contingency plan

Question 11

Expected monetary loss for an asset due to a risk over a one-year period; calculated by multiplying single loss expectancy by annualized rate of occurrence.

Answer 11

Annualized Loss Expectancy (ALE)

Question 12

Organization’s desired gain or acceptable loss in value.

Answer 12

Risk position

Question 13

System for identifying, evaluating, and controlling actual and potential risks to an organization.

Answer 13

Risk management

Question 14

A characterization of the amount of uncertainty (acceptable risk) an organization is willing to pursue or to accept to attain its risk management goals, defined in a range above and below a target.

Answer 14

Risk tolerance

Question 15

Reporting of an organization’s violations of policies and processes by employees.

Answer 15

Whistleblowing

Question 16

Expected monetary loss every time a risk occurs; calculated by multiplying asset value by exposure factor.

Answer 16

Single loss expectancy (SLE)

Question 17

Potential for harm, often associated with a condition or activity that, if left uncontrolled, can result in injury or illness.

Answer 17

Hazard

Question 18

Amount of uncertainty that remains after all risk management efforts have been exhausted.

Answer 18

Residual Rik

Question 19

person engages in risky behavior knowing that someone else will absorb any losses.

Answer 19

Moral hazard

Question 20

risks that affect the organization’s ability to achieve its objectives

Ex: investment, engagement, diversity, consumer behavior, competitive behavior

Answer 20

Strategic risks

Question 21

risks that affect the myriad ways in which the organization creates value

Ex: sustainability, supply chain, data privacy, process efficiency and effectiveness

Answer 21

Operational risks

Question 22

risks that affect the accuracy and timeliness of information about the organization’s financial performance and condition

Ex: growth of assets, misappropriation of assets

Answer 22

Financial risks

Question 23

risks that have the potential to cause physical harm to property or people (for example, an illness or injury) in the immediate and long term

Ex: injury and illness, health and safety natural, environmental or elemental causes,

Answer 23

Hazard risks

Question 24

The 3 barriers to risk management

Answer 24

1- Structural (Organizations that are structured in a silo fashion tend to respond to risk in an operational rather than strategic manner. They overlook dependencies within the organization that can create risks and/or interfere with proactive risk management.)

2- Cognitive (Risks have been clearly identified and responses fully defined. It is a realm of “if-then” scenario)

Cultural (cultural barriers ultimately involve what types of mindsets are sought, instilled, and rewarded.)

Question 25

Calculate risk level

Answer 25

Probability of occurrence x Magnitude of impact

Question 26

The degree of probability that a loss will occur

Answer 26

Vulnerability

Question 27

The possible effect on the organization, and tolerance is the amount of risk the organization can handle if an event occurs

Answer 27

Impact

Question 28

(occurs after analysis of probability, risk, and speed of onset.)

Answer 28

Mitigation planning

Question 29

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Answer 29

Organizations must be proactive with regard to workplace violence. There should be a written policy outlining the organizational stance toward workplace violence and outlining response procedures designed to prevent possible threats from escalating. Designating a response team, employing security personnel, and developing resources for employees are additional steps that can assist in the prevention of workplace violence. Conducting drills, including active shooter drills, can ensure that employees know how to react if an instance of workplace violence occurs.

Question 30

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Answer 30

Before engaging in any drug testing, it is important to verify that organizational policies and procedures comply with all applicable federal laws and regulations and state laws. Varying jurisdictions may have laws that impact testing procedures following an incident at work or during pre-employment testing and other workplace screenings. Laws may specify acceptable recourse following a positive test. For example, some jurisdictions will mandate that an employee has the option of participating in a rehabilitation program following his or her first positive test, barring the organization from dismissing the employee as a result.

Question 31

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Answer 31

Organizations must be proactive with regard to workplace violence. There should be a written policy outlining the organizational stance toward workplace violence and outlining response procedures designed to prevent possible threats from escalating. Designating a response team, employing security personnel, and developing resources for employees are additional steps that can assist in the prevention of workplace violence. Conducting drills, including active shooter drills, can ensure that employees know how to react if an instance of workplace violence occurs.

Question 32

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Answer 32

In some cases, risks with a large potential impact may be subjected to further analysis before evaluation. For example, scenarios may be created for events at different levels of severity or opportunity—different levels of success with a new executive recruiter and what that will mean to the organization’s ability to execute its strategic plans, loss of productivity caused by storms of different magnitudes. This aspect of risk analysis can be highly technical.