Which metric is a backward-looking indicator that shows risk has been realized after an event has occurred?

Which metric is a backward-looking indicator that shows risk has been realized after an event has occurred?

• A. KPI
• B. KRI
• C. Lag risk indicator
• D. Business case

Answer: (C)

Backward-looking indicators capture what happened and show that risk has materialized after an event. A lag risk indicator fits this precisely because it reports outcomes that have already occurred, such as realized losses, incident duration, remediation costs, or penalties. This provides a historical view of risk impact and how well controls performed in response. In contrast, a Key Risk Indicator is meant to signal rising risk before events happen, acting as a warning. A KPI focuses on performance against objectives and isn’t inherently about risk realization. A business case is a justification document for a project, not a metric of risk outcomes.

Backward-looking indicators capture what happened and show that risk has materialized after an event. A lag risk indicator fits this precisely because it reports outcomes that have already occurred, such as realized losses, incident duration, remediation costs, or penalties. This provides a historical view of risk impact and how well controls performed in response.

In contrast, a Key Risk Indicator is meant to signal rising risk before events happen, acting as a warning. A KPI focuses on performance against objectives and isn’t inherently about risk realization. A business case is a justification document for a project, not a metric of risk outcomes.