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

Which issues should always be escalated to higher-level committees before decision-making?

1. Those important but lacking critical information

2. Those that are overly complex and not understood

3. Those that exceed the authority of the decision-maker

4. Those falling within the decision-maker's authority

The correct answer is: Those that exceed the authority of the decision-maker

Escalating issues that exceed the authority of the decision-maker to higher-level committees is crucial for effective governance and decision-making within organizations. This practice ensures that significant decisions, which may have wider implications or require additional oversight, are made by individuals or committees that possess the necessary authority and expertise. When a decision exceeds the decision-maker's authority, it can lead to potential legal or financial ramifications for the organization. This escalation process not only safeguards against potential missteps but also promotes accountability and thorough evaluation. Involving higher-level committees can provide a broader perspective, facilitate informed decision-making, and ensure compliance with organizational policies and regulations. In contrast, issues that are important but lack critical information or those that are overly complex and not understood may still warrant further investigation or additional information gathering at the current level, rather than immediate escalation. Similarly, matters falling within the decision-maker's authority should be addressed by that individual or team, as they are equipped to handle them appropriately. Thus, only those matters that exceed established authority should be consistently escalated to ensure proper governance and risk management practices.