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FRM Part II · FRM Exam Part II · Introduction to Operational Risk and Resilience

Which responsibility is most appropriately assigned to the board of directors, rather than senior management, in an operational risk governance framework?

The board should approve and periodically review the operational risk framework and risk appetite and hold senior management accountable for implementing them. Day-to-day self-assessments, loss data upkeep and detailed control design are management responsibilities carried out by the lines of defense.

  1. AApproving and periodically reviewing the operational risk framework and risk appetite, and holding senior management accountable for implementing itCorrect
  2. BPerforming day-to-day risk and control self-assessments in each business line
  3. CMaintaining the loss event database and reconciling it to the general ledger
  4. DDesigning detailed control procedures for each process

Explanation

The board sets the tone, approves and reviews the framework and appetite, and oversees management. Self-assessments, loss data maintenance and control design are management or operational tasks, delegated to the lines.

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