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PRMIA 8020 Exam - Topic 2 Question 17 Discussion
Topic #: 2
Which of the following statements is best for inclusion in the values to be set for a Risk Function?
Step 1: Role of a Risk Function
A Risk Function ensures that an organization follows best practices in risk governance, assessment, and control implementation.
It should be aligned with the board's risk strategy and ensure independent oversight.
Step 2: Why Option B is Correct
The board sets the overall risk strategy, and the risk function implements risk controls accordingly.
PRMIA emphasizes board oversight as the guiding force behind risk management.
Step 3: Why the Other Options Are Incorrect
Option A ('Implement management's direction') Incorrect because risk oversight should be board-driven, not solely management-driven.
Option C ('Ensure opinions are listened to') Incorrect because risk functions enforce policies, not just share opinions.
Option D ('Lower risk-taking to zero') Incorrect because risk-taking is necessary for growth---excessive risk aversion harms business.
PRMIA Risk Reference Used:
PRMIA Risk Governance Framework -- Highlights board oversight in risk management.
Basel III Risk Management Standards -- Emphasizes board-driven risk controls.
Final Conclusion:
The Risk Function must follow the board's direction in implementing risk controls, making Option B the correct answer.
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