Why is risk management considered a corporate governance responsibility?
Correct answer: A. It helps the board oversee threats to the company's objectives
- A. It helps the board oversee threats to the company's objectives
- B. It allows directors to remove all uncertainty from business
- C. It transfers every business risk to external auditors
- D. It ensures that no company project can ever fail
Explanation
Effective risk management identifies, assesses, and controls significant threats so that the board can make informed decisions. It reduces exposure but cannot eliminate uncertainty or guarantee that projects will succeed.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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