Risk Management Quiz

What is the primary focus of traditional rules-based risk management?

• Strategic risk management

• Compliance and control

• External risk mitigation

• Innovation and development

Which type of risk is described as internal and controllable, and should be eliminated or avoided?

• Strategy risks

• External risks

• Preventable risks

• Operational risks

What is a key characteristic of strategy risks?

• They arise from external events beyond the company's control.

• They are inherently undesirable and should be avoided.

• They are taken voluntarily to achieve superior returns.

• They are managed through strict compliance and rules.

Which approach is recommended for managing external risks?

• Rules-based compliance

• Scenario planning and stress testing

• Internal audits and controls

• Employee training programs

What cognitive bias involves overestimating one's ability to influence events?

• Confirmation bias

• Overconfidence bias

• Anchoring bias

• Groupthink

What is the purpose of a risk event card?

• To document and assess the impact of potential risk events on operations.

• To outline the company's mission and values.

• To provide a checklist for compliance with regulations.

• To allocate resources for risk mitigation.

Which company is mentioned as using a risk review board to manage project-level risks?

• BP

• Hydro One

• JP Morgan

• Jet Propulsion Laboratory (JPL)

What is the main goal of war-gaming in risk management?

• To comply with regulatory requirements.

• To assess the impact of natural disasters.

• To evaluate the company's vulnerability to disruptive technologies or competitor strategies.

• To monitor employee behavior and compliance.

Which type of risk requires open discussions and debates for effective management?

• Preventable risks

• Strategy risks

• External risks

• All of the above

What is a common problem with rules-based risk management according to the document?

• It is too flexible and lacks structure.

• It often fails to address the likelihood or impact of major disasters.

• It encourages too much innovation and risk-taking.

• It is too focused on external risks.