Which of the following statements are true for enterprise's risk management capability maturity level 3?
Click on the arrows to vote for the correct answer
A. B. C. D.ABD.
An enterprise's risk management capability maturity level is 3 when: -> Risk management is viewed as a business issue, and both the drawbacks and benefits of risk are recognized.
-> There is a selected leader for risk management, engaged with the enterprise risk committee, across the enterprise.
-> The business knows how IT fits in the enterprise risk universe and the risk portfolio view.
-> Local tolerances drive the enterprise risk tolerance.
-> Risk management activities are being aligned across the enterprise.
-> Formal risk categories are identified and described in clear terms.
-> Situations and scenarios are included in risk awareness training beyond specific policy and structures and promote a common language for communicating risk.
-> Defined requirements exist for a centralized inventory of risk issues.
-> Workflow tools are used to accelerate risk issues and track decisions.
Incorrect Answers: C: Enterprise having risk management capability maturity level 5 requires continuous improvement of risk management skills, based on clearly defined personal and enterprise goals.
Enterprise Risk Management (ERM) capability maturity model is a framework that assesses and classifies an organization's maturity in managing risks. There are five maturity levels, ranging from ad-hoc risk management to a fully integrated and optimized risk management program.
Level 3 maturity, also known as the "Defined" stage, is characterized by a formal and structured approach to risk management. At this level, the organization has established processes, policies, and procedures for identifying, assessing, and managing risks.
To address the given question, let's look at each option individually:
A. Workflow tools are used to accelerate risk issues and track decisions This statement is true for level 3 maturity. At this stage, the organization has implemented workflow tools to streamline the risk management process and track risk-related decisions.
B. The business knows how IT fits in the enterprise risk universe and the risk portfolio view This statement is also true for level 3 maturity. At this stage, the organization has a clear understanding of how IT fits into the overall risk universe and has developed a risk portfolio view to prioritize risks.
C. The enterprise formally requires continuous improvement of risk management skills, based on clearly defined personal and enterprise goals This statement is true for level 3 maturity. At this stage, the organization has a formalized process for identifying and addressing skill gaps in the risk management team. Personal and enterprise goals are defined, and training programs are in place to support continuous improvement.
D. Risk management is viewed as a business issue, and both the drawbacks and benefits of risk are recognized. This statement is also true for level 3 maturity. At this stage, the organization views risk management as a strategic business issue and recognizes both the potential drawbacks and benefits of managing risks.
In summary, all of the statements given are true for an organization at level 3 maturity in enterprise risk management.