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IFA Corporate Governance & Risk Management Flashcards

6 cards from real IFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 IFA Corporate Governance & Risk Management flashcards as text

  1. What is corporate governance?

    Answer: The system by which companies are directed and controlled to balance the interests of stakeholders

    Corporate governance encompasses the structures, rules, and processes by which a company is directed and controlled, ensuring accountability to shareholders and other stakeholders.

  2. What is the primary role of a company's board of directors?

    Answer: To provide strategic oversight, monitor management, and safeguard shareholder interests

    The board of directors provides strategic direction, oversees management performance, ensures appropriate risk management, and is accountable to shareholders for the company's governance.

  3. What distinguishes non-executive directors (NEDs) from executive directors?

    Answer: NEDs are not employed full-time by the company and bring independent oversight without managing operations

    Non-executive directors are independent of management and operations, bringing objective scrutiny and representing shareholder interests without involvement in day-to-day management.

  4. What is an enterprise risk management (ERM) framework?

    Answer: A structured approach to identifying, assessing, and managing risks across the entire organization

    ERM provides a comprehensive, organization-wide approach to identifying all material risks, assessing their likelihood and impact, and implementing responses to manage them within risk appetite.

  5. Which governance principle ensures that decision-makers are answerable for their actions?

    Answer: Accountability

    Accountability requires that directors and managers are responsible and answerable for their decisions and actions to shareholders and other stakeholders.

  6. What is 'risk appetite' in the context of corporate risk management?

    Answer: The level and type of risk an organization is willing to accept in pursuit of its objectives

    Risk appetite defines how much and what types of risk an organization is prepared to accept in order to achieve its strategic goals, guiding decision-making throughout the business.

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Sources & references

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  1. ifa.org.uk — Renewal, fees, eligibility, test dates, test delivery, passing score, score release · verified Oct 2026