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FRM Part II · FRM Exam Part II · Risk Reporting

A risk manager presents a dashboard of key risk indicators (KRIs) to the executive committee. Each KRI shows a current value, a green/amber/red status, and nothing else. Which addition would most improve the report's usefulness for decision-making?

Adding trend data against thresholds, plus commentary on causes and remediation actions for amber and red indicators, makes the dashboard actionable. A bare status colour does not show direction or response, while averaging or removing thresholds would hide breaches and weaken escalation.

  1. AShowing historical trend against defined thresholds, with commentary on causes and planned actions for amber and red itemsCorrect
  2. BReplacing the status colours with a single overall average score across all KRIs
  3. CRemoving thresholds so management is not constrained by predefined limits
  4. DListing KRIs alphabetically to make them easier to find

Explanation

Trend, thresholds and commentary on causes and actions let readers judge whether exposure is worsening and what is being done. A single average hides individual breaches. Removing thresholds eliminates the escalation trigger.

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