The selection of key risk indicators (KRIs) for monitoring the risk management program should be based on which of the following?

The selection of key risk indicators (KRIs) for monitoring the risk management program should ideally be based on a balance between lead and lag indicators. Lead indicators provide early signals of potential risks, allowing organizations to anticipate issues before they occur. They help in taking proactive measures and can influence decision-making. On the other hand, lag indicators reflect past performances and provide a measure of the outcomes of risks that have already materialized.

Having a balanced approach is crucial because it not only helps in understanding current risk exposures but also aids in forecasting future risks based on existing trends. This dual perspective allows organizations to create a more robust risk management framework that can adapt to changes and improve overall risk visibility. The combination ensures comprehensive monitoring, enabling timely actions and strategic adjustments.

While the other options present valuable aspects of selecting KRIs, such as stakeholder involvement or the need for automation, they do not encompass the essential need for a balanced approach between anticipating risks and assessing past outcomes, which is critical for effective risk management.