CISM · Question #775
Which of the following is the GREATEST challenge when developing key risk indicators (KRIs)?
The correct answer is D. Linking KRIs to specific risks. Linking KRIs to specific risks (D) is the greatest challenge because KRIs are only meaningful if they serve as early warning signals for a particular risk - without that linkage, you have metrics that don't actually predict or measure anything actionable, making the entire KRI…
Question
Which of the following is the GREATEST challenge when developing key risk indicators (KRIs)?
Options
- ALimiting the number of KRIs
- BComprehensively reporting on KRIs
- CAggregating common KRIs
- DLinking KRIs to specific risks
How the community answered
(42 responses)- A12% (5)
- B21% (9)
- C7% (3)
- D60% (25)
Explanation
Linking KRIs to specific risks (D) is the greatest challenge because KRIs are only meaningful if they serve as early warning signals for a particular risk - without that linkage, you have metrics that don't actually predict or measure anything actionable, making the entire KRI program ineffective. Limiting the number of KRIs (A) is a governance decision, not a technical challenge - organizations simply prioritize and set thresholds. Comprehensively reporting on KRIs (B) is an operational task that tools and dashboards handle well once KRIs are defined. Aggregating common KRIs (C) is a process that adds efficiency but is straightforward once the underlying KRIs are already mapped to risks.
Memory tip: Think of it this way - a KRI without a linked risk is just a random metric. The word "indicator" only makes sense if it's indicating something specific; the hard part is always establishing that cause-and-effect relationship between the metric and the risk it's supposed to signal.
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