Which of the following is the GREATEST advantage of implementing a risk management program?
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A. B. C. D.A.
A risk management program is a structured approach to identifying, assessing, and prioritizing risks, and developing strategies to mitigate or manage them. It involves implementing processes, policies, and procedures to address potential risks that could impact an organization's goals and objectives. The advantages of implementing a risk management program are numerous, but one advantage stands out as the greatest among the four options provided.
The correct answer is C. Enabling risk-aware decisions.
Enabling risk-aware decisions means that the organization can make informed decisions based on the risks that it faces. By identifying and assessing risks, the organization can develop a deeper understanding of the potential impact of each risk, its likelihood of occurring, and the effectiveness of the current controls in place to mitigate the risk. This allows the organization to make informed decisions on how to allocate resources to manage the risk, and to prioritize its risk management efforts.
For example, a financial institution may identify cyber threats as a significant risk to its operations. By implementing a risk management program, the institution can assess the potential impact of a cyber attack and the effectiveness of current controls in place. This can inform decisions on how to allocate resources to mitigate the risk, such as investing in stronger cybersecurity measures, increasing employee training, or outsourcing certain functions to a third party.
Promoting a risk-aware culture (option A) is important, but it is a byproduct of implementing a risk management program. An effective risk management program can help to establish a culture where individuals understand the importance of managing risk and are empowered to do so.
Improving security governance (option B) is another benefit of a risk management program, as it helps to ensure that security controls are in place and are effective. However, this is just one aspect of risk management, and it is not necessarily the greatest advantage.
Reducing residual risk (option D) is also an important outcome of risk management, as it ensures that the organization has taken steps to reduce the level of risk that it faces. However, it is not the greatest advantage of implementing a risk management program.
In conclusion, the greatest advantage of implementing a risk management program is enabling risk-aware decisions. This enables the organization to make informed decisions on how to manage risks and allocate resources effectively.