Podcast
Questions and Answers
Which step in the four-step model involves understanding both internal and external contexts?
Which step in the four-step model involves understanding both internal and external contexts?
What does the step 'Manage the risks' focus on?
What does the step 'Manage the risks' focus on?
In the four-step model, what is implied if the answer to achieving stated objectives is 'no'?
In the four-step model, what is implied if the answer to achieving stated objectives is 'no'?
What primary question does the four-step risk management process answer?
What primary question does the four-step risk management process answer?
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How can the four-step risk management process be applied within an organization?
How can the four-step risk management process be applied within an organization?
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Which aspect is crucial for effective risk reporting according to the four-step model?
Which aspect is crucial for effective risk reporting according to the four-step model?
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What does a 'control' refer to in the context of managing risks?
What does a 'control' refer to in the context of managing risks?
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What might be a reason to change objectives during the risk management process?
What might be a reason to change objectives during the risk management process?
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What role does Enterprise Risk Management (ERM) play in relation to an organization's strategy?
What role does Enterprise Risk Management (ERM) play in relation to an organization's strategy?
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How can boards enhance the effectiveness of their governance in light of emerging risks?
How can boards enhance the effectiveness of their governance in light of emerging risks?
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Which of the following is NOT a benefit of risk management according to Chapman?
Which of the following is NOT a benefit of risk management according to Chapman?
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What is a key factor for Enterprise Risk Management to add value to an organization?
What is a key factor for Enterprise Risk Management to add value to an organization?
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What does corporate governance primarily focus on?
What does corporate governance primarily focus on?
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What is the consequence of a disconnect between ERM and strategic planning?
What is the consequence of a disconnect between ERM and strategic planning?
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Which of the following is a main component of effective governance in risk management?
Which of the following is a main component of effective governance in risk management?
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What aspect of risk management is emphasized by the EY (2019) paper?
What aspect of risk management is emphasized by the EY (2019) paper?
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What is the primary purpose of the Group Governance Manual (GGM) in risk management?
What is the primary purpose of the Group Governance Manual (GGM) in risk management?
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Which aspect of risk management is primarily the responsibility of the Board?
Which aspect of risk management is primarily the responsibility of the Board?
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What role does the Risk Committee play in Prudential's risk management framework?
What role does the Risk Committee play in Prudential's risk management framework?
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Why is it insufficient to simply add more personnel to a risk management team?
Why is it insufficient to simply add more personnel to a risk management team?
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What is a key component of the Group Risk Framework mentioned in Prudential's reporting?
What is a key component of the Group Risk Framework mentioned in Prudential's reporting?
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How does Prudential ensure accountability in risk management across the organization?
How does Prudential ensure accountability in risk management across the organization?
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In terms of risk reporting, what is a primary focus of the Risk Committee?
In terms of risk reporting, what is a primary focus of the Risk Committee?
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What is the significance of establishing a Group-wide approach to risk management?
What is the significance of establishing a Group-wide approach to risk management?
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Study Notes
Risk Management: Hybrid Approach
- Large, international organizations often implement a hybrid risk management structure.
- This approach balances a central risk management function with accountability at unit level.
- Prudential plc utilizes this model.
- The Group Governance Manual (GGM) defines their approach to governance, risk, and control.
- The Board is ultimately responsible for ensuring an effective risk management system.
- The Group Risk Framework mandates that all businesses identify, assess, manage, control, monitor, and report their risks.
Four-Step Risk Management Model
- The four-step risk management model was developed by Satarla.
- The model consists of defining context and objectives, assessing risks, managing risks, and monitoring, reviewing, and reporting.
- The model applies to all levels of an organization.
- It aims to keep the organization in balance with its objectives and risks.
Benefits of Risk Management
- Risk management offers several benefits, including improved strategy and governance, enhanced organizational performance, and improved human resources.
- Risk-informed decision-making should be a board priority.
- Enterprise Risk Management (ERM) should play an increasing role in setting and implementing strategy.
Corporate Governance and Risk
- Corporate Governance Institute (CGI) defines governance as rules, practices, and processes for directing and controlling a company.
- Effective governance ensures accountability, decision-making, and achieving objectives.
- Boards should focus on fast-evolving business environments and emerging risks.
- An integrated Governance, Risk, and Compliance (GRC) approach combines compliance, risk management, internal controls, and internal audit.
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Description
This quiz covers the hybrid approach to risk management utilized by organizations like Prudential plc, along with the four-step risk management model developed by Satarla. Explore how these frameworks help integrate risk management at all organizational levels, emphasizing the balance between objectives and risks.
