In which way can risks be effectively monitored?

Monitoring risks effectively is fundamentally about ensuring that they remain within the organization’s defined risk appetite. The risk appetite defines the level of risk that an organization is willing to accept in pursuit of its objectives. By continuously assessing risks to determine if they are within this acceptable range, organizations can proactively manage risk exposure and make informed decisions. This ongoing evaluation allows for timely responses to emerging risks or changes in the business environment, thereby safeguarding the organization’s interests.

Other options, such as documenting risks in a yearly report, do not provide an ongoing mechanism for monitoring and responding to risks as they develop. While documentation is important, it can become outdated and does not offer real-time insights. Sharing risks without clear guidelines lacks a structured approach necessary for both understanding and mitigating those risks effectively. Similarly, avoiding any mention of risks in operations could lead to a lack of awareness among stakeholders, ultimately increasing vulnerability to potential threats. Therefore, continuously ensuring that risks are within the defined risk appetite is the most effective approach to monitoring risks.