CGRC Governance Principles 2

Question 1

Which governance principle ensures that decision-makers are answerable for their actions and outcomes?

Accepted Answer

Accountability

Answer

Accountability means that individuals and entities must answer for their decisions, actions, and resulting outcomes.

Question 2

A board of directors delegates operational authority to management while retaining oversight. This structure best reflects which governance concept?

Accepted Answer

Principal-agent relationship

Answer

The principal-agent relationship describes how principals (board) delegate authority to agents (management) while retaining oversight responsibilities.

Question 3

Which body is ultimately responsible for setting the risk appetite of an organization?

Accepted Answer

Board of Directors

Answer

The Board of Directors holds ultimate responsibility for defining and approving the organization's risk appetite.

Question 4

The Three Lines of Defense model assigns risk ownership to which line?

Accepted Answer

First line — operational management

Answer

The first line (operational management) owns and manages risks as part of day-to-day business activities.

Question 5

Which governance document formally defines the authority, responsibilities, and membership of a board committee?

Accepted Answer

Committee charter

Answer

A committee charter formally establishes the authority, scope, responsibilities, and composition of a board committee.

CGRC - Certified Governance Risk and Compliance Practice Test

CGRC - Certified Governance Risk and Compliance Practice Test

CGRC Governance Principles 2