SHRM-CP Learning System

Full Answer Section

1. Risk Impact:
   • Is the current risk control effectively mitigating the potential impact of the risk event if it occurs?
   • Are there ways to further minimize the potential financial, reputational, or operational damage?
   • Is the organization adequately prepared to respond to the event if the control fails?
2. Cost-Effectiveness:
   • Are the costs associated with the control proportionate to the potential benefits of risk reduction?
   • Are there more efficient or cost-effective ways to achieve the same level of risk mitigation?
   • Could technology or automation be used to improve the cost-effectiveness of the control?
3. Compliance:
   • Does the control comply with all relevant laws, regulations, and industry standards?
   • Are there any legal or regulatory changes that could impact the effectiveness of the control?
   • Have all employees been adequately trained on the control and its implementation?
4. Monitoring and review:
   • Is the control being monitored on a regular basis to assess its effectiveness?
   • Are there clear reporting mechanisms in place to identify any issues or concerns?
   • Is the control reviewed and updated periodically to reflect changes in the risk environment or organizational needs?

Examples of risk mitigation techniques:

• Risk effusiveness technique: Brainstorming: Gather a diverse group of stakeholders to identify potential risks and brainstorm mitigating strategies. This technique encourages creative thinking and helps to identify risks that might have been overlooked.
• Risk control process: Incident reporting: Implement a system for employees to report near misses, incidents, and safety concerns. This information can be used to identify and address potential risks before they cause serious problems.

Importance of involving HR and other groups in risk assessment:

1. Diverse perspectives: HR professionals bring unique insights into employee behavior, workplace culture, and potential legal and regulatory risks. Other groups, such as finance, operations, and IT, can offer their expertise in their respective areas of responsibility. This diversity of perspectives is crucial for identifying and understanding all relevant risks.
2. Collaboration and ownership: When different groups are involved in risk assessment and mitigation, it fosters a sense of shared responsibility and ownership. This makes everyone more accountable for managing risks and implementing effective controls. Additionally, collaboration across departments can lead to more comprehensive and integrated risk management strategies.

Sample Answer

Questions to assess risk effectiveness and risk control:

1. Risk Likelihood:
   • Is the current risk control effectively reducing the likelihood of the risk event occurring?
   • Have there been any recent near misses or incidents related to this risk?
   • Has the underlying risk environment changed, requiring adjustments to the control?