Understanding Risk Management Differences

What is the primary focus of traditional risk management?

• Eliminating all risks in business operations.

• Minimizing potential losses and ensuring safety in operations.

• Maximizing profits regardless of risks.

• Focusing solely on compliance with regulations.

How does enterprise risk management differ in scope compared to traditional risk management?

• ERM has a broader scope, integrating risk management across the entire organization, while traditional risk management is more siloed and departmental.

• ERM is only concerned with compliance and regulatory issues, unlike traditional risk management.

• Traditional risk management is more comprehensive and includes all departments of the organization.

• ERM focuses only on financial risks, while traditional risk management covers all types of risks.

What role does every employee play in risk management according to the article?

• Every employee plays a role in identifying and managing risks.

• Employees should avoid discussing risks.

• Risk management is solely the responsibility of the compliance team.

• Only managers are responsible for risk management.

Why is a siloed approach to risk management considered less effective?

• It promotes better communication between departments.

• It is less effective because it creates fragmentation and hinders collaboration across departments.

• It allows for more comprehensive risk assessments.

• It simplifies the decision-making process for management.

What is one example of a risk management action taken by a janitor?

• Ignoring spills on the floor

• Placing 'Wet Floor' signs to prevent slips.

• Throwing trash in the wrong bin

• Using a mop to clean the floor

How does enterprise risk management approach insurable risks?

• Insurable risks are only assessed after they occur.

• Enterprise risk management approaches insurable risks by identifying, assessing, and prioritizing them, then determining appropriate risk transfer methods like insurance.

• Insurance is never considered in enterprise risk management.

• Enterprise risk management ignores insurable risks entirely.

What is a key benefit of enterprise risk management over traditional methods?

• Emphasis on compliance with regulations only.

• Focus on individual risks rather than the organization as a whole.

• A holistic approach to risk management across the organization.

• Limited to financial risks without considering operational risks.

In what way does the IT Director contribute to risk management?

• The IT Director is responsible for financial audits only.

• The IT Director manages employee performance reviews.

• The IT Director plays a key role in identifying, assessing, and mitigating IT-related risks to ensure organizational security and compliance.

• The IT Director focuses solely on hardware procurement.

What type of insurance might a company purchase as part of risk management?

• health insurance

• auto insurance

• travel insurance

• General liability insurance, property insurance, workers' compensation insurance, professional liability insurance

How can understanding risk management benefit students in their future careers?

• It teaches students to avoid all risks completely.

• It guarantees a high salary in any job.

• Understanding risk management helps students make informed decisions, enhances problem-solving skills, and increases employability in various fields.

• It focuses solely on financial investments.