Risk and Insurance Management Society (RIMS) Certified Risk Management Professional (CRMP) Practice Exam

Which action is least effective in contributing to risk management success?

1. Regularly revising risk management policies based on new data

2. Ignoring minor risks that do not seem to affect profits

3. Involving all employees in the risk identification process

4. Providing continuous training for risk management practices

The correct answer is: Ignoring minor risks that do not seem to affect profits

Ignoring minor risks that do not seem to affect profits is least effective in contributing to risk management success because a comprehensive risk management strategy requires awareness and evaluation of all potential risks, regardless of their immediate impact on profits. Minor risks can accumulate over time or could be interconnected with other risks, leading to larger issues that could negatively affect the organization. Effective risk management involves a proactive approach to identify and assess all types of risks—no matter how trivial they may appear at first. In contrast, regularly revising risk management policies based on new data ensures that the organization stays current with evolving risks and can adapt strategies accordingly. Involving all employees in the risk identification process fosters a culture of risk awareness and allows for a broader perspective on potential threats. Providing continuous training for risk management practices keeps employees informed and equipped to address risks effectively. Each of these actions enhances the overall risk management framework of an organization, unlike the decision to ignore minor risks, which could lead to vulnerabilities and missed opportunities for improvement.