Question

Cal was just hired as the first risk manager for XYZ Company. Cal would like to employ the risk management process. The first step in the process Cal should follow is to

a) Monitor and review
b) Identify and analyze
c) Implement and administer
d) Establish the context

Answer 1

Cal, as a risk manager, should start with establishing the context to frame the parameters within which risks will be assessed, aligning the process with the organization's policies and risk appetite.

Step-by-step explanation:

The first step that Cal should follow in the risk management process for XYZ Company is to establish the context. This entails setting the foundation for the rest of the process by understanding the environment in which the organization operates, clarifying its objectives, defining the external and internal parameters that must be taken into account when managing risk, and setting the scope and risk criteria for the remaining process. By establishing the context, Cal is framing the parameters within which risks must be assessed and managed, aligning it with the organization's policies, procedures, and risk appetite.