Explanation:
The correct answer is C.
According to Principle 3 of the Basel Committee's Principles for the Sound Management of Operational Risk, the board of directors should establish, approve, and periodically review the framework. A key component of this principle is that the board should ensure the operational risk management (ORM) framework is subject to effective and comprehensive independent review by an independent audit function or other appropriately trained and competent personnel.
Options A, B, and D describe roles associated with Principle 4, which is primarily concerned with the board's responsibilities to approve and review the bank's risk appetite and risk tolerance statements.
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Q.5057 The 3rd principle of operational risk management outlines the roles of the board of directors in operational risk governance. Which of the following roles of the board is in line with principle 3?
A
Identify the types and levels of operational risks the bank is willing to assume, as well as approve risk appetite and risk tolerance statements
B
Regularly review the bank's risk appetite and tolerance statements' appropriateness
C
Ensure the ORM framework is subject to independent review by sufficiently skilled personnel
D
Ensure that they consider all risks when approving the bank's risk appetite and tolerance statements which provide details on risk limits and thresholds.