RIMS Ethical Standards & Professional Conduct 2 — Questions and Answers
Question 1: A risk manager discovers that their employer is underreporting workplace injuries to avoid higher workers' compensation premiums. What is the most ethical course of action?
- Ignore the issue to maintain job security
- Report the misconduct internally and, if unresolved, to the appropriate regulatory authority (Correct answer)
- Adjust the reports slightly to reduce the discrepancy
- Consult only with colleagues to decide collectively
Correct answer: Report the misconduct internally and, if unresolved, to the appropriate regulatory authority
RIMS ethical standards require risk professionals to act with integrity, which includes reporting illegal or unethical practices through appropriate channels.
Question 2: Which principle in the RIMS Code of Ethics requires members to maintain and improve their professional knowledge and skills?
- Integrity
- Loyalty
- Competence (Correct answer)
- Transparency
Correct answer: Competence
The competence principle obligates RIMS members to continually develop their expertise to serve clients and employers effectively.
Question 3: A RIMS member is asked to provide a risk assessment for a project in an area outside their expertise. The ethical response is to:
- Complete the assessment using general risk principles
- Decline and refer to a qualified expert
- Disclose limitations and collaborate with a qualified expert (Correct answer)
- Provide the assessment with a broad disclaimer
Correct answer: Disclose limitations and collaborate with a qualified expert
Professional ethics require acknowledging the boundaries of one's competence and seeking appropriate expertise while remaining engaged when possible.
Question 4: When a risk manager receives gifts or entertainment from a vendor seeking to win a contract, the primary ethical concern is:
- Tax reporting obligations
- Conflict of interest and impaired objectivity (Correct answer)
- Violation of company travel policies
- Unfair advantage over other employees
Correct answer: Conflict of interest and impaired objectivity
Gifts from vendors create actual or perceived conflicts of interest that can compromise the risk manager's objectivity and professional judgment.
Question 5: Under RIMS ethical guidelines, confidential risk information obtained during professional duties may be disclosed when:
- Colleagues request it for peer benchmarking
- Required by law or authorized by the client/employer (Correct answer)
- The information is more than two years old
- Disclosure would benefit the industry broadly
Correct answer: Required by law or authorized by the client/employer
Confidentiality obligations can only be overridden by legal requirements or explicit authorization from the party to whom the duty is owed.
Question 6: A risk manager learns that a professional certification held by a colleague was obtained through fraudulent means. According to professional conduct standards, the risk manager should:
- Keep the information confidential to protect the colleague
- Report the matter to the certifying body (Correct answer)
- Confront the colleague privately and allow them to self-report
- Ignore the situation unless it directly affects their work
Correct answer: Report the matter to the certifying body
Professional conduct standards require reporting credential fraud to the certifying body to protect the integrity of the profession.
Question 7: Which action best demonstrates adherence to the RIMS ethical principle of fairness in professional dealings?
- Favoring vendors with whom the organization has the longest relationship
- Applying consistent standards when evaluating all competing vendors (Correct answer)
- Giving preference to minority-owned businesses without evaluation criteria
- Selecting vendors based on the recommendation of senior management alone
Correct answer: Applying consistent standards when evaluating all competing vendors
Fairness requires consistent, transparent criteria applied equally to all parties, ensuring impartial professional judgment.
RIMS Ethical Standards & Professional Conduct 2
A risk manager discovers that their employer is underreporting workplace injuries to avoid higher workers' compensation premiums.
What is the most ethical course of action?