Banking · Risk Governance
Effective risk governance requires that risk ownership, control functions, and oversight mechanisms be clearly defined within the institution. Which of the following best reflects sound risk-governance practice?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Risk limits should remain informal so that management retains maximum flexibility
- 2Internal audit should directly sanction all new business proposals before origination
- 3Risk management should function independently enough to challenge business decisions while remaining aligned with board-approved policy✓
- 4All material risk decisions should be left entirely to individual business units without independent review
Correct answer
Risk management should function independently enough to challenge business decisions while remaining aligned with board-approved policy
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