What is one of the key steps in developing an ORM framework?

Conducting assessments of current risks is a fundamental step in developing an Operational Risk Management (ORM) framework. This process involves identifying, analyzing, and evaluating the existing risks that an organization faces. By assessing current risks, organizations can understand their risk profile, the likelihood of occurrences, and the potential impact on objectives. This foundational step serves as the basis for prioritizing risk mitigation strategies, implementing controls, and allocating resources effectively. It ensures that the framework is tailored to the specific needs and vulnerabilities of the organization, thereby enhancing overall risk management efforts.

The other options, while they may have some relevance in risk management, do not serve the same foundational purpose in developing an ORM framework. For example, creating a risk diversification strategy is a tactic that may be implemented after risks have been assessed, rather than a key step in establishing the framework initially. Increasing insurance policies focuses on risk transfer rather than risk identification or mitigation and can be considered part of a broader risk response strategy. Limiting stakeholder communications does not contribute positively to ORM; in fact, effective communication with stakeholders is crucial for understanding risks and fostering a culture of risk awareness within the organization.