IRM ERM M1U6.4 - Board roles and responsibilities

Question 1

Risk Based Responsibilities of Non-executive directors (NEDs)

Answer 1

A key responsibility of NEDs is to act as constructive critics, particularly in challenging the integrity of financial information and risk management systems.

Responsibilities of NEDs include providing independent oversight, constructive challenge, and creative contribution to the board.

They play a role in setting strategic direction, monitoring performance, determining executive remuneration, and facilitating communication.

NEDs also ensure the integrity of financial information, robustness of risk management systems, and proper auditing processes.

This role is crucial, especially when NEDs are part of the audit committee

Question 2

Responsibilities of The Board as a group

Answer 2

Ultimately, the Board should assess whether the organization can achieve its objectives considering its operating context, risks, and risk management capabilities, and take appropriate actions accordingly.

The Board collectively holds key responsibilities for risk management and internal control, outlined by the FRC (2014) paper.

These responsibilities include ensuring the design and implementation of appropriate risk management and internal control systems.

The Board determines the nature and extent of principal risks, establishes risk appetite, and agrees on risk management strategies.

They monitor and review the effectiveness of risk management and internal control systems, ensuring corrective actions are taken when necessary.

The Board is also responsible for sound internal and external communication on risk management.

Question 3

CRO Responsibilities

Answer 3

Insights and context - using knowledge of internal and external influences to ensure robust risk management in responsive and agile organisations.

Strategy and Performance - developing a risk management strategy to meet organisational needs

Risk Management Process - managing the risk management process

Organisational Capability - developing and managing a skilled, agile and responsive risk organisation