What organizational function is accountable for establishing risk policies, guidelines, and standards?

What organizational function is accountable for establishing risk policies, guidelines, and standards?

• A. Operations
• B. IT
• C. Management
• D. Legal

Answer: (C)

The organizational function responsible for establishing risk policies, guidelines, and standards is management. This is because management plays a central role in setting the strategic direction of an organization, including the formulation and implementation of risk management strategies. They are tasked with ensuring that the organization not only meets its objectives but also identifies, assesses, and responds to risks. Management is responsible for overseeing the development of a risk management framework that reflects the organization’s risk appetite and aligns with its overall goals. They typically work to create policies and guidelines that provide a structured approach for managing risks at all levels of the organization. In contrast, operations, IT, and legal functions do contribute to risk management, but their roles are generally more focused on implementing risk policies, ensuring compliance, or addressing specific types of risks within their domains. Operations would be more concerned with the daily management of processes, IT focuses on technological risks and security measures, and legal is responsible for ensuring that the organization complies with laws and regulations. Thus, while these functions support risk management efforts, it is management that holds the accountability for the overarching policies and standards governing risk within the organization.

The organizational function responsible for establishing risk policies, guidelines, and standards is management. This is because management plays a central role in setting the strategic direction of an organization, including the formulation and implementation of risk management strategies. They are tasked with ensuring that the organization not only meets its objectives but also identifies, assesses, and responds to risks.

Management is responsible for overseeing the development of a risk management framework that reflects the organization’s risk appetite and aligns with its overall goals. They typically work to create policies and guidelines that provide a structured approach for managing risks at all levels of the organization.

In contrast, operations, IT, and legal functions do contribute to risk management, but their roles are generally more focused on implementing risk policies, ensuring compliance, or addressing specific types of risks within their domains. Operations would be more concerned with the daily management of processes, IT focuses on technological risks and security measures, and legal is responsible for ensuring that the organization complies with laws and regulations. Thus, while these functions support risk management efforts, it is management that holds the accountability for the overarching policies and standards governing risk within the organization.