What are risk indicators?

Risk indicators are metrics that help organizations monitor potential risks. These indicators are crucial for assessing whether risks remain within acceptable limits and for determining if any action is needed to manage those risks effectively.

By tracking these metrics over time, organizations can identify trends or anomalies that might suggest emerging risks, enabling proactive measures to be taken. In this context, risk indicators serve as early warning systems that can signal the need for closer scrutiny or intervention before a risk escalates into a more significant issue.

In contrast, guidelines for implementing risk controls focus on the procedures and measures to manage risks rather than monitoring them. Strategies for risk mitigation outline ways to reduce or eliminate risks but do not specifically measure or track them. Historical data on past incidents can inform risk planning and assessment but do not serve the primary purpose of continuously monitoring ongoing risks. Thus, the key function of risk indicators is their role in ongoing risk assessment and management, making them vital for maintaining an organization’s risk profile.