Explanation:
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. Providing direct guidance to the bank’s staff on operational risk management is the responsibility of Senior Management, not the Board of Directors. The Board's role is to oversee senior management to ensure that policies are effectively implemented.
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Q.38 Tom Mathews has been appointed as a director of a multinational bank. With respect to principle 3 (board review and approval of Operational Risk Management) of the Basel Committee principles for the Sound Management of Operational Risk, Tom Mathews as a director should least likely ensure that the board of directors perform which of the following?
A
Regularly review the operational risk management framework.
B
Provide the bank’s staff with guidance regarding operational risk management.
C
Ensure the ORM framework is subject to independent review.
D
Ensure that management follows the evolution of best practices.
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