Which of the following is the BEST indication of a good risk culture?

Which of the following is the BEST indication of a good risk culture?
A . The enterprise learns from negative outcomes and treats the root cause.
B . The enterprise enables discussions of risk and facts within the risk management functions.
C . The enterprise places a strong emphasis on the positive and negative elements of risk.

Answer: A

Explanation:

A good risk culture in an organization can be identified by several characteristics. Among the options provided:

Option A: The enterprise learns from negative outcomes and treats the root cause This option reflects a proactive and continuous improvement approach to risk management. It indicates that the organization does not just react to incidents but also learns from them and implements measures to address the underlying issues, thereby preventing recurrence. This approach aligns with best practices in risk management and demonstrates a mature risk culture. Option B: The enterprise enables discussions of risk and facts within the risk management functions While facilitating open discussions about risk is important, it primarily shows that the enterprise supports a communicative environment. However, it does not necessarily indicate that the enterprise takes concrete actions to learn from negative outcomes or address root causes.

Option C: The enterprise places a strong emphasis on the positive and negative elements of risk Emphasizing both positive and negative elements of risk is beneficial as it provides a balanced view.

Nonetheless, this focus alone does not provide evidence of actions taken to learn from past mistakes or to rectify the root causes of issues.

Conclusion:

Option A is the best indication of a good risk culture because it demonstrates that the organization is committed to learning from past failures and improving its risk management processes by addressing the root causes of problems.