Which of the following is NOT considered a primary type of operational risk?

In the context of operational risk management, the primary types of operational risk include risks that arise from internal processes, external events, and information technology. Internal risks are those inherent to an organization's operations, such as process failures or staff errors. External risks encompass events outside of an organization’s control that can still impact operations, like natural disasters or fraud. Information technology risks include issues related to technological systems, such as cyber threats or system failures.

Reputational risks, while significant, are generally regarded as a consequence or a resultant effect of operational failures rather than a primary type of operational risk itself. Reputational damage often stems from various operational risk incidents, including internal, external, or IT-related issues, but it does not directly fit into the classification of operational risks. Instead, it reflects the potential negative perception stakeholders may form about an organization due to its operational failures. Hence, it can be considered a secondary concern stemming from the primary operational risks. This distinction helps clarify why reputational risks are not categorized among the primary types of operational risk.