Risk Indices

FIC Risk Awareness Index (FRAI) Rating Scale with Descriptions

Please select the option that best describes your organization’s situation in each of the provided sections and submit your responses to receive your risk awareness rating and recommended next steps

Strongly Disagree

Disagree
.

Neither Agree nor Disagree

Agree
.

Strongly
Agree

Risk Indices

1. Risk Culture (5 points)

The organization lacks a formal risk culture; Risk awareness is minimal and is not considered in daily operations. Employees are unaware of risk management principles and there is no emphasis on risk in decision-making.

There is some awareness of risk, but it is not widely practiced or accepted; Risk management is discussed occasionally but is not part of the organizational culture. Employees have limited understanding and participation in risk-related activities.

The organization has a moderate level of risk awareness; Efforts are being made to embed risk culture, and risk management is considered in some decisions. Employees are becoming more familiar with risk principles.

A strong risk culture is present, with the majority of employees understanding and practicing risk awareness; Risk management is integrated into most business processes, and there is a clear emphasis on risk in decision-making.

The organization exhibits an excellent risk culture; Risk awareness is deeply ingrained at all levels, and all employees are proactive in identifying and managing risks. Risk management is a fundamental part of the organizational ethos.

2. Governance and Leadership (5 points)

Governance structures are weak, and there is little to no leadership commitment to risk management. Risk management responsibilities are unclear and poorly defined.

Basic governance structures are in place, but leadership engagement is limited. Risk management is recognized but not actively promoted by leaders.

Adequate governance structures exist, with some leadership commitment to risk management. Leaders occasionally engage in risk management activities and support risk initiatives.

Strong governance structures and leadership support are evident. Leaders actively promote and participate in risk management, ensuring it is integrated into strategic planning.

Governance structures are exceptional, with full leadership commitment and involvement in risk management. Leaders are champions of risk management, driving a risk- aware culture throughout the organization.

3. Risk Appetite and Tolerance (5 points)

The organization has no formal statements regarding risk appetite or tolerance. Risk decisions are made arbitrarily without a clear framework.

There is a basic understanding of risk appetite and tolerance, but it is informal and not consistently applied. Risk decisions lack coherence.

Risk appetite and tolerance levels are defined and implemented to some extent. There is a moderate level of understanding and application in decision-making.

The organization has clear risk appetite and tolerance statements that are well communicated and understood. These are consistently applied in decision-making processes.

Comprehensive risk appetite and tolerance frameworks are in place, fully integrated into all decision-making processes. The organization makes risk decisions within a well-defined and understood risk framework.

4. Risk Identification (5 points)

Risk identification processes are ad hoc and reactive. There is no formal approach to identifying risks, leading to frequent surprises.

Basic risk identification processes exist but are inconsistently applied. The organization occasionally identifies risks but lacks a systematic approach.

Structured risk identification processes are in place, with moderate effectiveness. The organization identifies most significant risks but may miss some emerging risks.

Robust risk identification processes are consistently applied. The organization effectively identifies most risks, including emerging and complex risks.

The organization has highly effective and proactive risk identification processes. All potential risks, including emerging and complex ones, are systematically identified and addressed.

5. Risk Assessment (5 points)

Risk assessment is inadequate with no formal methodology. Risks are rarely assessed, leading to poor understanding and mitigation.

Basic risk assessment processes are in place, but the scope and accuracy are limited. Assessments are inconsistent and lack depth.

Structured risk assessment processes are followed with moderate accuracy and scope. Most risks are assessed reasonably well.

Comprehensive risk assessments are conducted, with high accuracy and detailed scope. The organization has a thorough understanding of its risks.

Exceptional risk assessments are conducted, with very thorough and accurate methodologies. The organization deeply understands all its risks and their potential impacts.

6. Risk Response and Mitigation (5 points)

The organization has no formal risk response or mitigation strategies. Responses are reactive and often inadequate.

Basic risk response strategies exist but are inconsistently applied. Mitigation efforts are limited and often insufficient.

Structured risk response and mitigation strategies are in place with moderate effectiveness. Responses are generally adequate but can be improved.

Effective risk response and mitigation strategies are consistently applied. The organization is proactive in mitigating risks and responds efficiently to risk events.

Highly effective and proactive risk response and mitigation strategies are in place. The organization excels in mitigating risks and responds swiftly and effectively to any risk events.

7. Risk Monitoring and Reporting (5 points)

Monitoring and reporting of risks are inadequate, with poor structures in place. Risk information is not regularly updated or communicated.

Basic monitoring and reporting processes exist but are limited and irregular. Risk information is sometimes outdated or incomplete.

Structured monitoring and reporting processes are followed, with regular updates. Risk information is generally accurate and timely.

Robust monitoring and reporting processes are in place, providing comprehensive and frequent updates. Risk information is accurate and widely communicated.

The organization has highly effective monitoring and reporting processes, offering real-time updates and in-depth analysis. Risk information is accurate, timely, and thoroughly communicated across the organization.

8. Training and Awareness (5 points)

There are no formal risk management training programs. Employees lack understanding and awareness of risk management principles.

Basic training programs exist but have limited reach and impact. Employees have some awareness but lack comprehensive understanding.

Regular training programs are in place, with moderate impact. Employees have a good understanding of risk management principles and practices.

Comprehensive training programs are implemented, with high levels of employee engagement. Most employees understand and apply risk management principles effectively.

Exceptional training programs are in place, deeply embedded within the organization. All employees are highly knowledgeable and proactive in managing risks.

9. Technology and Data (5 points)

The organization makes minimal use of technology and relies on outdated systems. Risk management processes are manual and inefficient.

Basic technology is used with limited integration. Risk management processes are somewhat automated but still rely heavily on manual input.

Moderate use of technology with some integration. Key risk management processes are automated, improving efficiency and accuracy.

Advanced technology is used, with well-integrated systems. Most risk management processes are automated and highly efficient.

The organization uses state-of-the-art technology, fully integrated across all risk management processes. Automation is extensive, and data analytics are used to enhance risk management capabilities.

10. Stakeholder Involvement (5 points)

Stakeholder involvement in risk management is minimal. Communication with stakeholders about risks is rare or non-existent.

Basic stakeholder involvement, with limited engagement. Stakeholders are occasionally informed about risks but not actively involved in the management process.

Moderate stakeholder involvement, with some engagement. Stakeholders are regularly informed and occasionally involved in risk management activities.

Strong stakeholder involvement, with active engagement. Stakeholders are regularly informed and actively participate in risk management processes.

Exceptional stakeholder involvement, with full engagement. Stakeholders are deeply involved in all aspects of risk management, from identification to mitigation.

Risk Indices

FIC Risk Awareness Index (FRAI) Rating Scale with Descriptions

Strongly Disagree

Disagree.

Neither Agree nor Disagree

Agree.

Strongly Agree

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Disagree
.

Agree
.

Strongly
Agree