Key Risk Indicators (KRIs) are critical predictors of unfavourable events that can adversely impact organizations. They monitor changes in the levels of risk exposure and contribute to the early warning signs that enable organizations to report risks, prevent crises and mitigate them in time.
At a fundamental level, Key Performance Indicators (KPIs) measure that degree to which as result of objective is met, while Key Risk Indicators (KRIs) measure changes to risk exposure. Key Control Indicators (KCIs) measure how well a control is performing in reducing causes, consequences or the likelihood of a risk.
The five measures include the alpha, beta, R-squared, standard deviation, and Sharpe ratio. Risk measures can be used individually or together to perform a risk assessment.
Whereas risk factors may increase the likelihood that a certain outcome will occur, indicators may help to assess whether it is occurring.
High Risk Indicator means a diagnostic finding which causes an individual to be susceptible to hearing loss because of biological or environmental factors.
Leading indicators are proactive measurements that help predict and prevent injury and illness in the workplace. These indicators focus on future safety performance and continuous improvement to help reduce risks.
Control effectiveness indicators, usually referred to as Key Control Indicators (KCIs), are metrics that provide information on the extent to which a given operational risk control is meeting its intended objectives. KCIs indicate the effectiveness of particular controls at a particular point in time.
Risk is a combination of three components: hazard, exposure, and vulnerability. Data from each of these categories can be used to paint a picture of risk in a certain location and over time.
During the risk identification phase, all possible risks are listed as scenarios. Risks are identified, analyzed and then categorized according to priority. During this stage, the focus is on the main risks to the company. The checklist is often called the danger list.
Risk factors are characteristics at the biological, psychological, family, community, or cultural level that precede and are associated with a higher likelihood of negative outcomes. Protective factors are characteristics associated with a lower likelihood of negative outcomes or that reduce a risk factor's impact.
Risks are normally classified as time (schedule), cost (budget), and scope but they could also include client transformation relationship risks, contractual risks, technological risks, scope and complexity risks, environmental (corporate) risks, personnel risks, and client acceptance risks.
According to this typology, there are four types of indicators: input, output, outcome and impact.
An example of a key performance indicator is, “targeted new customers per month”. Metrics measure the success of everyday business activities that support your KPIs. While they impact your outcomes, they're not the most critical measures. Some examples include “monthly store visits” or “white paper downloads”.
A good key risk indicator must have 3 essential characteristics to meet their objective: be measurable, quantifiable and accurate. This means, first of all, that it must be quantified as an amount or percentage, or it must have values that show evolution over time.
Identify hazards and risk factors that have the potential to cause harm (hazard identification). Analyze and evaluate the risk associated with that hazard (risk analysis, and risk evaluation). Determine appropriate ways to eliminate the hazard, or control the risk when the hazard cannot be eliminated (risk control).
Risk Assessment Step #1: Identify Hazards In The Workplace
Identifying and locating potential hazards is the first step in a risk assessment. Several different types of hazards should be considered.