What does the term "risk control" refer to in ORM?

The term "risk control" in the context of Operational Risk Management (ORM) specifically pertains to the measures taken to mitigate or manage identified risks. This involves implementing strategies and practices designed to reduce the likelihood of a risk event occurring or lessening its potential impact if it does occur.

The essence of risk control is to recognize that while it may not be feasible to completely eliminate risks (an idea that is reflected in the incorrect option regarding eliminating risks), organizations can put in place effective controls to manage them. This includes designing processes, implementing safeguards, conducting regular assessments, and ensuring compliance with policies that govern operational activities.

Effective risk control can take various forms, such as enhancing operational processes, providing training to staff, installing technological solutions, and maintaining insurance policies, all aimed at minimizing the adverse effects associated with operational risks.

In contrast, options that focus solely on crisis management or internal communication do not encompass the broader scope of risk control, which is fundamentally concerned with ongoing management and mitigation of risks rather than reactive measures or communication enhancements.

Thus, measures that mitigate or manage identified risks form the backbone of a robust ORM strategy, aligning closely with risk control principles.