Module 4 - ERM Framework

Question 1

What are the 7 Components of the ERM Framework?

Answer 1

Governance (Processes and Controls)
Line Management (Integration into biz processes e.g pricing)
Portfolio Management (Hedging risk, diversification vs concentration)
Risk transfer (mitigate excessive risk exposure)
Risk Analytics (measure, analyse and report)
Data and Technological (Analytics and reporting)
Stakeholder management (communicate and report)

Question 2

What is corporate governance codes?

Answer 2

Risk management and system of internal controls that ensure a company operates in a sound and secure way

Question 3

What internal controls does the corporate governance cover? (5)

Answer 3

Accurate record keeping
Preventing Fraud and protecting co's assets
Guaranteeing accuracy of co statements
Responding appropriately to risk
Ensuring compliance law

Question 4

Corporate governance best practice (5)

Answer 4

Communication with stakeholders
Independence of the board
Board Performance
Board remuneration
Board appointments

Question 5

The Walker Review themes

Answer 5

Comply/Explain approach is best
Challenging board discussions from right mix and capabilities
Board level risk oversight increase, board risk subcomittee
Board remuneration should extend to other influential senior employees

Question 6

Risk Culture elements (7)

Answer 6

Encourage good internal communication
Accountability not blame
Successful risk supporting can do perception vs box ticking
Consultative leadership
Openness (risk communication upward, down, side)
Participation in risk decision making
Knowledge sharing (new threats, mitigation suggestion, defective procedures, opportunities, procedure breaks)
Organisational Learning (introductory courses)