FRM Part II · FRM Exam Part II · Guidance on Managing Outsourcing Risk
Which item is most appropriately the responsibility of the board, rather than of operational vendor managers, in an outsourcing framework?
Setting the risk appetite and approving the outsourcing policy for material arrangements is the board's responsibility. Daily service-level reconciliation, ticket logging and invoice review are operational tasks performed by management and vendor managers, not matters requiring board-level decisions.
- ASetting the institution's risk appetite and approving the outsourcing policy for material arrangementsCorrect
- BDaily reconciliation of service-level reports
- CLogging individual service tickets
- DReviewing monthly invoices from the provider
Explanation
The board sets strategy, risk appetite and approves policy. Daily reconciliations, ticket logging and invoice review are operational tasks handled by management and staff.
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