ARM 400 Chapter 5 - Part 1
The cornerstone of a proper risk management program is: - correct answer
✔Corporate governance.
Corporate governance seeks to ensure that: - correct answer ✔A company's
management and board of directors operate with the best interests of the
owners in mind.
Corporate governance and risk management are inextricably linked, because:
- correct answer ✔The decisions that constitute effective corporate
governance affect each of the quadrants of risk.
Although value maximization is a primary goal of corporate governance, these
issues may present competing concerns: - correct answer ✔Social
responsibility issues may present competing concerns.
To provide guidance to companies in effective governance, governments and
business oversight organizations in many countries have produced: - correct
answer ✔Corporate governance codes
e.g., public companies in the U. S. must comply with Securities & Exchange
Commission SEC rules. Compliance is generally straightforward: posting
employment rules, filing regulatory documents, & implementing environmental
or safety standards, e.g. However, risk management is still involved in: -
correct answer ✔Monitoring changes in the laws and handling repercussions
if adherence misses the mark.
The emphasis of corporate governance is on: - correct answer ✔Developing
and supporting mechanisms and procedures that enhance shareholder value.
, Shareholders of for-profit companies generally want managers to make risk
management and other decisions that: - correct answer ✔Maximize the
value of their shares, which in turn generally requires maximization of the
company's total economic value.
A company's economic value depends on: - correct answer ✔The
magnitude, timing, and risk of expected future cash flows.
Not-for-profit organizations have different goals. Their broad goal can be
viewed as: - correct answer ✔Maximizing the value of goods or services
provided to their various constituencies.
Despite this difference, many corporate governance issues are: - correct
answer ✔Similar for for-profit and not-for-profit companies.
Is it beneficial to separate the ownership of a company from control of the
company: - correct answer ✔Yes.
Midsize to large companies generally separate: - correct answer
✔Ownership and control.
Separating ownership and control means that: - correct answer ✔A company
is owned by its shareholders but controlled by its board of directors and
management.
The vast majority of shareholders aren't: - correct answer ✔Actively involved
in managing the company they own.
Instead, the company is run by: - correct answer ✔Management.
The cornerstone of a proper risk management program is: - correct answer
✔Corporate governance.
Corporate governance seeks to ensure that: - correct answer ✔A company's
management and board of directors operate with the best interests of the
owners in mind.
Corporate governance and risk management are inextricably linked, because:
- correct answer ✔The decisions that constitute effective corporate
governance affect each of the quadrants of risk.
Although value maximization is a primary goal of corporate governance, these
issues may present competing concerns: - correct answer ✔Social
responsibility issues may present competing concerns.
To provide guidance to companies in effective governance, governments and
business oversight organizations in many countries have produced: - correct
answer ✔Corporate governance codes
e.g., public companies in the U. S. must comply with Securities & Exchange
Commission SEC rules. Compliance is generally straightforward: posting
employment rules, filing regulatory documents, & implementing environmental
or safety standards, e.g. However, risk management is still involved in: -
correct answer ✔Monitoring changes in the laws and handling repercussions
if adherence misses the mark.
The emphasis of corporate governance is on: - correct answer ✔Developing
and supporting mechanisms and procedures that enhance shareholder value.
, Shareholders of for-profit companies generally want managers to make risk
management and other decisions that: - correct answer ✔Maximize the
value of their shares, which in turn generally requires maximization of the
company's total economic value.
A company's economic value depends on: - correct answer ✔The
magnitude, timing, and risk of expected future cash flows.
Not-for-profit organizations have different goals. Their broad goal can be
viewed as: - correct answer ✔Maximizing the value of goods or services
provided to their various constituencies.
Despite this difference, many corporate governance issues are: - correct
answer ✔Similar for for-profit and not-for-profit companies.
Is it beneficial to separate the ownership of a company from control of the
company: - correct answer ✔Yes.
Midsize to large companies generally separate: - correct answer
✔Ownership and control.
Separating ownership and control means that: - correct answer ✔A company
is owned by its shareholders but controlled by its board of directors and
management.
The vast majority of shareholders aren't: - correct answer ✔Actively involved
in managing the company they own.
Instead, the company is run by: - correct answer ✔Management.
