Quiz Risk Management

What key characteristic of an effective risk management program is identified in ISO 31000?

Fits the organization's risk and control environment

Which benefit is most likely realized when an organization implements effective risk management techniques?

Increased confidence among internal and external stakeholders

Which is the primary reason an HR manager should check with legal counsel before concluding that a situation constitutes an unlawful conflict of interest?

Interpretation of a conflict of interest can vary significantly depending on jurisdiction.

What is the primary benefit of using a risk register?

It creates transparency and accountability.

Which item identifies a structural barrier to risk management?

Likelihood that business units will value operational needs

Management decides that training supervisors to identify and prevent bullying is not necessary, and they do not fund a program budget. Which aspect of risk management does this illustrate?

Organization's risk tolerance

An organization has entered the market as a new player and decided to be a pay leader. This may prove to be risky if demand for the company's services doesn't reach expectations. What may have led to the company's decision to choose this pay approach?

Paying a premium to attract high-quality employees optimizes the risk and eliminates uncertainty.

Which is an example of the moral hazard at work in an organization?

A CEO tells operations to take shortcuts that increase revenue but reduce quality for customers.

An organization has identified multiple goals for its risk management program. How does it go about sifting through the risks to prioritize those that will get attention and resources immediately?

A risk scorecard can identify the higher threats and priorities; these can be ranked by their scores.

Increased global competition has forced an organization's leadership team to analyze and manage unanticipated risks. The team is using a risk scorecard to help assess a variety of risks. How should the various risks be weighted?

According to strategic importance

After-action debriefs examine the effectiveness of a risk response strategy and can be an educational opportunity for everyone attending. There is a good argument to be made that debriefs should occur whenever a risk management plan has been invoked.

After-action debriefs

Organizations have contingency plans for which primary purpose?

Aid in rebuilding and recovering the organization.

Which characteristic is most important in an effective risk management system?

Alignment with organizational goals

Which is the first step a global HR director should take when managing compliance risk associated with a new law being implemented in one of the countries the firm operates?

Evaluate new requirements relative to existing policies and procedures.

Which risk factor is being sought by an HR director at a retail store chain who meets with senior leadership to discuss the amount of uncertainty the organization is willing to accept regarding wage and hour practices?

Appetite

What competencies and skills can an HR manager instill in order to be proactive with a risk management initiative?

Being preventive, predictive and confidently taking preemptive actions

Which type of HR audit reviews whether employees are taking required meal breaks and overtime is being calculated and paid properly?

Compliance

Which is an example of the risk management strategy of mitigation?

Department leaders train two employees to perform critical leadership tasks.

After the board and the senior administrator have reviewed, assessed, and prioritized the items that pose the highest risk to the organization's strategic goals, which is the next step in their process?

Develop an approach to assign ownership, manage, and monitor the risk.

Following the termination of an employee for making physical threats, which next step should an HR manager take in the evaluation phase of the risk management process?

Discuss the termination process with the affected team.

Which organization cultural elements are most important when compiling an accurate and reliable risk analysis?

Employees that are honest and are willing to discuss shortcomings.

A company wants to ensure that it is able to react quickly and effectively in the event of a crisis. The vice president of HR is in charge of developing a crisis management plan. What is the first step the vice president should take?

Establish a planning team.

What is the first step of the International Organization for Standardizaion's (ISO) risk management process?

Establish the risk context

An HR task force has determined that inclement weather that could interfere with the ability of critical personnel to reach work occurs with moderate frequency in a particular region. Forecasting has become much better at providing accurate advanced warning. The group is using a PAPA model to decide appropriate risk management strategies. Which evaluation approach is best to take for this risk?

Prepare

If a company wants to reinforce the importance of safety, which factors should it use as a link to the employees' annual bonuses?

Preventive safety steps reporting on potential risks or hazards

Which recommendation should an HR professional offer to help ensure the company's safety program is sustainable?

Promote safety quality assurance and continuous improvement.

HR is responsible for an on-site day-care center and uses a third-party expert to assess safety and implement recommended changes to the facility. Which critical step in risk management is missing from this process?

Regularly checking site and monitoring adherence to policies and practices

When challenged to prove the worth of risk management to an organization's leaders, which benefit should an HR professional describe?

Risk management leads to more-efficient use of organizational resources.

A global organization that employs many people on international assignments has developed a crisis management plan related to potential terrorist attacks. How can HR evaluate plan effectiveness?

Train, test, and conduct drills.

Which category of risk applies to Nassim Taleb's "black swan" theory?

Unknown unknowns