Risk Management Lessons

Question 1

ISO 31000 is separated into what three risk management areas?

Answer 1

Principles
Framework
Process

Question 2

What is the ISO 31000 intended as?

Answer 2

A generic guidelind document

Question 3

What do the ISO 31000 principles section emphasise?

Answer 3

That RM is an integral part of an organisational process and decision making

Question 4

What do the ISO 31000 framework section emphasise?

Answer 4

Help organisations integrate RM into their management framework

Question 5

What do the ISO 31000 process section emphasise?

Answer 5

Covers risk identification, assessment and management

Question 6

What is FERMA?

Answer 6

Federation of European Risk Management Associations

Question 7

Why does IRM retain its support FERMA?

Answer 7

Outlines practical and systematic approach to RM for business managers

Question 8

UK Stock Exchange listed companies are required to…

Answer 8

document risk management arrangements to support good governance

Question 9

ERM depends on people and so…

Answer 9

brings a risk of unreliability

Question 10

What terminology does FERMA use?

Answer 10

ISO

Question 11

What are KRI’s and KCI’s?

Answer 11

KRIs = key risk indicators 
KCIs= Key control indicators

Question 12

What do KRIs help with?

Answer 12

Identify increases in probability of incidents occuring

Question 13

What do KCIs help with?

Answer 13

indicating controls are not wokring effectively or have failed

Question 14

What decision did Equitable Life’s management make?

Answer 14

To sell products that were only profitable ub tines of high inflation + minimal reserves

Question 15

What contributed to the company’s demise?

Answer 15

• high risk business strategy

- forceful executives

Question 16

Why didn’t Equitable lifes governance checks work?

Answer 16

non-executive directors were incompetent/bullied

• nO CONTOGNECY CAPITAL
• No access to to further shareholder funds

Question 17

covid shows…

Answer 17

What can happen if serious risks are not identified

Question 18

Greenfall shows…

Answer 18

consequences of a known risk being ignored or hidden

Question 19

What is the essence of benchmarking?

Answer 19

comparing your performance with best practice examples on a regular basis

Question 20

What is the essence of the AIRMIC,alarm IRM philosophy regarding RM and organisation culture?

Answer 20

RM must be integrated into the culture

Question 21

WHY is COSO internal control framework used in US organisations and their overseas branches?

Answer 21

compliance satisfies us legal requirements for financial reporting set out in Sarbanes-oxley

Question 22

What was the key decision that led to the demise of Equitable Life and why was it so important?

Answer 22

Full distribution policy

Question 23

What pay structures criticised for contributing to financial crisis?

Answer 23

multi-million salaries. Targets short term

Question 24

Two main business reasons for the collapse of Equitable Life were:

Answer 24

high guarantees on its pension products and overly generous payouts.

Question 25

The aviation industry is known for having a no blame safety culture at its heart. This means that:

Answer 25

those within the industry are encouraged to learn from events and near misses.

Question 26

One of the signs that risk management is embedded within an organisation is:

Answer 26

risk management issues will feature prominently in the annual report.

Question 27

The main purpose of the Public Interest Disclosure Act 1998 is to:

Answer 27

encourage individuals to report instances of wrongdoing within an organisation.