Organizations can encourage positive events and prevent negative ones by implementingproactive actions and controls. Proactive controls arepreventive measuresdesigned to address risks and opportunitiesbefore they occur, reducing the likelihood of undesirable outcomes and increasing the probability of achieving organizational objectives.
Key Aspects of Proactive Actions and Controls:
* Prevention Focus:
* Proactive controls mitigate risks by addressing vulnerabilities and root causes.
* Example: Regular security audits to prevent data breaches.
* Encouraging Positive Outcomes:
* Proactive controls also identify opportunities and create conditions that increase the likelihood of achieving desirable results.
* Example: Implementing reward systems to encourage employee innovation.
* Early Identification:
* Proactive actions help organizations identify risks and opportunities early, providing time to act effectively.
Why Option A is Correct:
Proactive actions and controls aredesigned to prevent negative eventsandpromote positive ones, making them the most effective way to achieve this goal.
Why the Other Options Are Incorrect:
* B. Employee training and follow-up: While training is an important part of proactive measures, it is not sufficient on its own to encourage positive events or prevent negative ones.
* C. Using financial actions and controls: Financial controls focus on budgets and resources but do not inherently address broader risks and opportunities.
* D. Relying on responsive actions and controls: Responsive controls address events after they occur, rather than preventing or encouraging outcomes proactively.
References and Resources:
* ISO 31000:2018- Highlights the role of proactive risk treatment and opportunity management.
* COSO ERM Framework- Discusses preventive and proactive actions for achieving objectives.
* NIST Cybersecurity Framework (CSF)- Recommends proactive controls for addressing risks.

In theGRC Capability Model, theREVIEWcomponent is designed to ensure continuous improvement and accountability by monitoring, evaluating, and assuring the effectiveness of actions, controls, and strategies.
This component ensures that the organization stays on track to achieve its objectives while addressing risks and obligations.
Key Objectives of the REVIEW Component:
* Monitoring Actions and Controls:
* Ensures that implemented controls and actions are functioning as intended to manage risks and seize opportunities.
* Providing Assurance:
* The REVIEW component validates that the organization's actions align with its objectives, policies, and obligations, often through internal audits or performance evaluations.
* Continuous Improvement:
* By analyzing the effectiveness of controls, the REVIEW component identifies areas for improvement and ensures the organization adapts to changing circumstances.
* Holistic Focus:
* Unlike a narrow focus on compliance or monitoring, the REVIEW component evaluates total performance, encompassing objectives, risks, and obligations.
Why Option B is Correct:
The REVIEW component focuses oncontinuous improvementbymonitoring actions and controlsand providingassurancethat objectives, opportunities, risks, and obligations are being managed effectively, making it the most comprehensive answer.
Why the Other Options Are Incorrect:
* A. Implementing new policies and procedures: Implementation is part of the Perform component, not the REVIEW component.
* C. Exclusively focusing on monitoring: While monitoring is part of the REVIEW component, it also includes assurance and continuous improvement, making this option incomplete.
* D. Conducting audits and inspections: Audits are a subset of assurance activities, but the REVIEW component goes beyond audits to ensure total performance improvement.
References and Resources:
* OCEG GRC Capability Model- Provides guidance on the REVIEW component's role in monitoring and assurance.
* COSO ERM Framework- Highlights the importance of monitoring and continuous improvement.
* ISO 31000:2018- Discusses evaluating risk management performance as part of an ongoing review process.

Key external stakeholders include those who have significant influence over the organization's operations, strategy, and outcomes, such ascustomers, shareholders, creditors and lenders, government, and NGOs.
* External Stakeholder Roles:
* Customers: Drive revenue and product/service demand.
* Shareholders: Provide capital and influence strategic decisions.
* Creditors and Lenders: Affect financing and liquidity.
* Government and NGOs: Set regulatory frameworks and advocate for societal priorities.
* Why Other Options Are Incorrect:
* A: Distributors and resellers are part of supply chain stakeholders, not key external influencers.
* B: Employees and board members are internal stakeholders.
* C: Marketing agencies and auditors are third-party service providers, not primary external stakeholders.
References:
* Stakeholder Management Standards (ISO 26000): Discusses key stakeholder identification.
* COSO Framework: Emphasizes the importance of external stakeholder engagement in risk management and governance.