Which of the following best describes key performance indicators (KPIs) in risk management?

Key performance indicators (KPIs) in the context of risk management are specifically defined metrics used to assess the effectiveness and efficiency of risk management processes and strategies. They serve as measurable values that help organizations track their progress toward achieving specific risk-related objectives. By focusing on KPIs, organizations can quantify their ability to identify, assess, and mitigate risks, which is crucial for maintaining operational integrity and achieving strategic goals.

For example, a KPI might measure the number of identified risks that have been mitigated within a certain timeframe or the percentage of risk assessments completed on schedule. These metrics provide valuable insights into how well the risk management processes are functioning and whether adjustments are needed to improve overall performance. Thus, the emphasis on KPIs as metrics for evaluating risk management processes aligns with their role in fostering continuous improvement and informed decision-making.