Which of the following would contribute to better risk tolerance?

Study for the CII Certificate in Insurance - Introduction to Risk Management (I11). Review key concepts, understand risk principles, and test your knowledge with multiple choice questions.

The option that contributes to better risk tolerance is having clear guidelines from leadership. When leadership provides well-defined guidelines, it establishes a framework within which employees can operate confidently. This clarity helps in understanding what is expected in various risk scenarios and supports informed decision-making.

Clear guidelines enable individuals and teams to assess risks effectively and respond appropriately, fostering an environment where reasonable risks can be taken without fear of negative consequences. This encourages innovation and proactive risk management, as employees feel more comfortable navigating uncertainties when they know the parameters within which they can operate.

In contrast, the other options, such as a lack of open communication, blind adherence to regulations, and inflexible risk policies, can hinder risk tolerance. Without open communication, doubts and uncertainties can lead to misinterpretation of risks. Blind adherence to regulations may stifle creativity and limit the ability to adapt to new situations. Inflexible risk policies can create barriers that discourage taking necessary risks, ultimately leading to a more risk-averse culture.

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