In ORM, what does the term 'exposure' relate to?

In operational risk management (ORM), the term 'exposure' primarily relates to the length of time a risk is present and the potential that it has to affect operations. Understanding this concept is crucial because exposure signifies the duration that a risk can influence processes or outcomes, increasing the likelihood of negative consequences. The longer a risk is present, the greater the chance of it materializing and causing issues, whether these be financial, operational, or reputational.

Moreover, when assessing exposure, it helps in identifying how to mitigate that risk effectively, as longer exposure may require more robust controls or contingencies. Factors like timing and persistence of risk are vital to understanding the risk landscape in any operational environment, allowing for informed decision-making to minimize potential effects on the organization or mission.