PRMIA Exam 8004 Topic 1 Question 27 Discussion

Actual exam question for PRMIA's Case Studies; Standards: Governance, Best Practices and Ethics exam

Question #: 27
Topic #: 1

[All Case Studies; Standards: Governance, Best Practices and Ethics Questions]

Boards, including Audit and Risk Committees must:

I Clearly articulate the corporate risk appetite to senior management

II Thoroughly review compensation plans of potentially "highly compensated positions" for consistency with corporate risk appetite, competitive market conditions and fiduciary responsibility to shareholders

III Have a single member formally given responsibility for understanding and reporting the effectiveness of the corporation's risk management infrastructure

IV. Be fully accountable to shareholders and work to the benefit of public good and financial stability

AI and II only

BI, II and IV only

CI, II and III only

DAll of these are responsibilities of Board and Audit Committees

Show Suggested Answer

Suggested Answer: D

by Jani at Jul 03, 2024, 07:05 AM

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Jarod

2 months ago

I agree with Maxima, the board better not be padding their own pockets at the expense of shareholders! C seems like the best answer.

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Maxima

2 months ago

Haha, I bet the 'highly compensated positions' are the board members themselves! They better make sure those plans align with the risk appetite.

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Jarvis

1 months ago

User1: Definitely, they need to be accountable to shareholders and work for the benefit of the public good.

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Latia

2 months ago

User3: And they should have someone specifically responsible for understanding and reporting on the effectiveness of risk management.

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Nikita

2 months ago

User2: I agree, that would be a conflict of interest. They need to review those plans thoroughly.

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Lizette

2 months ago

User1: Yeah, they better not be setting their own compensation without considering the risk appetite.

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Micah

3 months ago

I believe the correct answer is B) I, II and IV only, as these responsibilities are crucial for the effective functioning of Boards and Audit Committees.

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Kayleigh

3 months ago

I'm not sure about option C) I, II and III only, because I think having a single member responsible for understanding risk management is also important.

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Lynelle

3 months ago

D is the correct answer. All of those responsibilities are part of the board and audit committee's duties.

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Lezlie

2 months ago

Yes, that's true. They also need to thoroughly review compensation plans for consistency with corporate risk appetite and fiduciary responsibility to shareholders.

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Kimberlie

3 months ago

I think it's important for the board to clearly articulate the corporate risk appetite to senior management.

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Vilma

3 months ago

I agree with Geoffrey, the Board and Audit Committees should focus on articulating risk appetite, reviewing compensation plans, and being accountable to shareholders.

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Geoffrey

3 months ago

I think the answer is B) I, II and IV only.

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Socorro

3 months ago

I think the answer is C. The board and audit committee must clearly articulate the risk appetite, review compensation plans, and have a single member responsible for understanding the risk management infrastructure.

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Erick

3 months ago

User2

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Raelene

3 months ago

User1

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