RIMS CRMP Exam Study Guide Common Terms Questions and Answers

Benchmarking - Correct Answer The process of measuring the performance of an organization against external standards of reference that frequently come from similar organizations doing similar things. Corporate governance - Correct Answer The system of rules, practices and processes by which a company is directed and controlled Enterprise risk management - Correct Answer A strategic discipline that supports the achievement of an organization's objectives by addressing the full spectrum of its risk and managing the combined impact of those risks as an interrelated risk portfolio. Strategy: Consider all risks and exploit risks as part of strategy Measurement: Include Upside of Risk (Bugalla and Kugler) Look at building, expanding, exploiting to add value Push and Pull risk performance data This approach is Coordinated & Strategic Gap analysis - Correct Answer Comparison of an existing process or procedure to recognized standards in order to identify deficiencies or excesses in the existing process. Technique that can be used to determine what steps might need to be taken to improve the organization's capacity to move from a current state to a desired future state. Key performance indicator (KPI) - Correct Answer An activity that signals the achievement of organizational objectives Key risk indicator (KRI) - Correct Answer A measurement of how risk and volatility relate to achieving organizational objectives Designed to manage the downside of risk Leading indicators of risk to business performance; giving early warning of potential risk early signal of changes in risk exposures in various areas of the enterprise Risk Metrics - Correct Answer Integrated into the performance objectives of the organization for monitoring risks Examples: KPIs and KRIs