CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Risk Management
Kaveri Pharma Ltd adopts the COSO ERM approach. Its board first reviews how the company's governance, culture and mission influence the way risks are viewed and managed, before listing individual risks. Which element of the framework does this review correspond to?
This corresponds to governance and culture. In the COSO ERM framework, this component establishes the tone, oversight structures and values that shape how the organisation views and handles risk, and it comes before identifying and responding to individual risks.
- ARisk response selection
- BGovernance and cultureCorrect
- CMonitoring of performance variances
- DInformation and communication channels
Explanation
In the COSO ERM (2017) framework, governance and culture is the foundation component that sets the tone, oversight and ethical values affecting risk handling. Risk response is a later step after risks are assessed, so that option is wrong for a first-stage review of culture.
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