FRM Part II · FRM Exam Part II · Risk Reporting
A head of operational risk notices that the monthly report sent to senior executives is 60 pages of tables, and executives rarely act on its content. Which revision most closely follows good practice for report content and design?
The best revision is a short executive summary stating key exposures, limit breaches and decisions required, with supporting detail moved to appendices. Reports should be tailored to the audience and highlight what matters, whereas more tables, wider circulation or a single score reduce usefulness.
- AAdd more granular data tables so executives can find any figure they need
- BKeep the full report but distribute it to a wider audience to raise awareness
- CReplace the narrative with a single composite risk score to remove subjectivity
- DProvide a short executive summary of key exposures, breaches and required decisions, with detail in appendices for those who need itCorrect
Explanation
Effective reports are tailored to the audience, concise, and highlight material issues and decisions required, with supporting detail available separately. More data or wider distribution worsens overload, and a single score hides the drivers of risk and removes the context needed for action.
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