Risk Assessment & Management Flashcards
7 cards from real CED practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Assessment & Management flashcards as text
Under the duty of care standard for nonprofit board members, which action best demonstrates sound risk oversight?
Answer: Reviewing audited financial statements and asking informed questions
The duty of care requires board members to review financial and operational information with reasonable diligence, including asking probing questions.
A key program staff member unexpectedly resigns. Which risk category does this primarily represent?
Answer: Operational risk
Key person dependency and sudden staff departures disrupt day-to-day program delivery, making this an operational risk.
When conducting a stakeholder analysis as part of risk management, the primary goal is to:
Answer: Identify parties who can be affected by or influence organizational risks
Stakeholder analysis maps who has influence over or is impacted by risks, enabling more targeted communication and mitigation strategies.
An executive director is evaluating whether to launch a new fee-for-service program. A risk-adjusted approach would include:
Answer: Modeling best-case, expected, and worst-case financial scenarios
Scenario modeling across optimistic, realistic, and pessimistic outcomes allows leaders to evaluate risk-adjusted returns before committing resources.
Which of the following is an example of an inherent risk in nonprofit management?
Answer: Risk existing before any controls or mitigation measures are applied
Inherent risk is the level of risk present in a process or activity before any controls are applied.
A nonprofit executive director is asked to sign a multi-year lease for a new facility. The highest risk concern that should be assessed is:
Answer: Long-term financial obligation versus projected revenue stability
Multi-year leases create fixed financial obligations, so the key risk is whether projected revenues can reliably support those costs over the lease term.
Which metric is most useful for tracking the effectiveness of an organization's risk management program over time?
Answer: Percentage reduction in risk incidents or near-misses year over year
Tracking reductions in actual risk incidents and near-misses measures whether risk controls are working in practice.