Whether you love or hate them, it is hard to dispute thepopularity of fortune cookies. With more than 3 billion fortunecookies consumed annually around the world, it is clear many peopleenjoy the mystique of fortune cookies in their reputed ability topredict the future. And everyone wants to know what the future willbring.

This is especially true in the world of risk management, whereprofessionals are dedicated to identifying current and futuresources of risk or loss, and eliminating or mitigating suchpotential loss through the application of controls. Incookie-speak: “Your life will prosper only if you see andacknowledge your faults, and work to reduce them….”

In this process, key risk indicators (KRIs) are metrics orpieces of data serving as early warning signs of areas ofincreasing risk. In contrast to key performance indicators (KPIs),which are statistics or data points showing what has happenedin the past or current time, KRIs portend future trends, losses andopportunities. When designed carefully, organized well, andcommunicated timely, KRIs are more credible and predictable than amere theoretical fortune. They are used by risk managers toproactively monitor operational processes, and identify potentialbusiness, legal, financial or other environmental risks that mayaffect the company, long before they can occur.