The KPI that best measures effectiveness of risk management is one that shows risk alignment with tolerance levels.
CRISC defines:
“Risk management effectiveness is demonstrated when risk scenarios are managed within the organization’s defined tolerance.”
B and C are activity-based, not outcome-based.
D measures realized losses, not ongoing control success.
Hence, A. The percentage of risk scenarios within organizational tolerance directly reflects program effectiveness.
CRISC Reference: Domain 4 – Risk and Control Monitoring and Reporting, Topic: Key Risk and Performance Indicators.
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