Explanation

Correct Answer: B (II only)

Analysis:

I. Develop the organization's risk appetite statement - This is NOT typically a Board function. The Board's role is to:

• Review and approve the risk appetite statement
• Provide oversight and guidance
• Ensure alignment with strategic objectives

The actual development of the risk appetite statement is typically done by:

• Senior management
• Risk management function
• Risk committees

II. Determine if the risk appetite may cause risks in other areas of the organization - This IS a reasonable Board function. The Board should:

• Consider interdependencies between risks
• Assess how risk appetite in one area might create risks elsewhere
• Ensure comprehensive risk oversight across the organization

Key Points:

• Board's Role: Strategic oversight, approval, and monitoring
• Management's Role: Development, implementation, and execution
• Risk Interdependencies: The Board must consider how risk decisions in one area affect the entire organization

Therefore, only task II is reasonably performed by the Board of Directors.