What are key risk indicators (KRIs)?

Key risk indicators (KRIs) are specifically designed metrics that help organizations identify potential risks or increasing risk exposures. They function as early warning signals, allowing management and stakeholders to monitor and assess the current risk landscape. By focusing on such indicators, organizations can take proactive measures to mitigate risks before they escalate into more significant issues.

In contrast, the other options pertain to different aspects unrelated to risk management. Metrics that assess employee performance focus on individual contributions rather than broader organizational risks. Financial standards used for performance reviews are tied to financial performance metrics, which do not inherently indicate risk levels. Lastly, strategic goals for reducing operational costs are aimed at efficiency and cost management rather than at identifying or monitoring risks. Thus, KRIs stand out distinctly as tools for risk assessment and management.