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ERM and Strategy

ERM Tool: Using Bow-Tie Analysis to Develop Key Risk Indicators

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Using Bow Tie Analysis To Develop Key Risk Indicators

Many organizations find that the “bow-tie” analysis tool is helpful in guiding business leaders through the design of effective metrics that they can use as key risk indicators to monitor risk trends. The “bow” in the tool is reflected below as the “risk” that is in the center of the diagram, similar to the knot in a bow-tie. This is the risk that is of concern.

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