Key Risk Indicator Decision Makers

AB.

An enterprise may have hundreds of risk indicators such as logs, alarms and reports.

The CRISC will usually need to work with senior management and business leaders to determine which risk indicators will be monitored on a regular basis and be recognized as KRIs.

Incorrect Answers: C, D: Chief financial officer and human resource only overview common risk view, but are not involved in risk based decisions.

The Key Risk Indicator (KRI) is a metric used to measure and monitor the level of risk in an enterprise's key business areas. KRIs provide early warning signals of potential risks that may adversely affect the organization's objectives.

Regarding who should decide the KRIs of an enterprise, the responsibility typically falls on senior management, who are ultimately accountable for the organization's risk management program. Therefore, option B (Senior management) is one of the correct answers.

While business leaders (option A) may provide input into the identification of key risks and corresponding KRIs, they may not necessarily make the final decision on which KRIs to use. However, their involvement in the risk management process is crucial to ensure that risks are appropriately identified and managed within the context of the organization's strategic goals.

Human resources (option C) typically does not have a direct role in determining KRIs. However, they can play a supportive role by ensuring that the organization has appropriate policies and procedures in place to manage HR-related risks, such as employee turnover or compliance with labor laws.

Chief financial officers (option D) may be involved in the selection of KRIs that relate to financial risks, such as liquidity, credit, or market risks. However, they may not necessarily have a broader perspective on enterprise-wide risks that affect the organization's non-financial objectives. Therefore, while they may provide input into the KRI selection process, they may not necessarily make the final decision.

In summary, the two role carriers who will typically decide the Key Risk Indicator of the enterprise are senior management (option B) and business leaders (option A) who provide input into the risk management process.