RSK2601 – Memo – May/June 2016 Examination
Questio Answe Explanation
n r
1 3 Because of the diversity of risk exposures, risk management requires a broader approach
(Pg 7 SG) (SU1 Pg 3 Edge Notes)
2 1 It is acknowledged that in their daily activities, businesses are exposed to various risks
and that it is necessary to take certain risks to maximize business opportunities. (Pg 8
SG) (SU1 Pg 4 Edge Notes)
3 2 A risk management policy sets out how the risks, which have been identified by the risk
assessment procedure, will be managed and controlled. (Pg 11 SG) (SU1 Pg 8 Edge Notes)
4 4 ERM is a structured and systematic process that is interwoven with existing management
responsibilities. It provides a framework based on analyzing risks and opportunities, with
an ultimate objective of creating value for the shareholders. (Pg 9 SG) (SU1 Pg 5 Edge
Notes)
5 2 The board’s role is to steer the corporation towards corporate governance
policies that support long-term sustainable growth in shareholder value. (Pg 8 SG) (SU1
Pg 5 Edge Notes)
6 4
, RSK2601 – Memo – May/June 2016 Examination
(Appendix 1 Pg 98 SG)
7 4 Investors are willing to pay a premium for good governance for three reasons.
They believe that the company will perform better over time, which will mean higher
share prices.
It is a way of reducing risk by either avoiding it altogether or by coping better with
adverse events.
The focus on corporate governance is a trend, but the reality is that no one wants to be
left behind.
(Pg 17 SG) (SU2 Pg 11 Edge Notes)
8 2 Attracting lower-cost capital:
o By improving the confidence of domestic and international investor
o Change = constant and corporate managers should continually revise
strategies to meet these changes. (Pg 15 SG) (SU2 Pg 10 Edge Notes)
9 4 The King II Report moved away from the single bottom-line principle (i.e. profit for
shareholders) to a triple bottom-line principle, which takes into account the
environmental, economic and social activities of a company. (Pg 16 SG) (SU2 Pg 11 Edge
Notes)
10 4
11 1 Risk principles (Pg 18 SG) (SU2 Pg 12 & 13 Edge Notes)
Questio Answe Explanation
n r
1 3 Because of the diversity of risk exposures, risk management requires a broader approach
(Pg 7 SG) (SU1 Pg 3 Edge Notes)
2 1 It is acknowledged that in their daily activities, businesses are exposed to various risks
and that it is necessary to take certain risks to maximize business opportunities. (Pg 8
SG) (SU1 Pg 4 Edge Notes)
3 2 A risk management policy sets out how the risks, which have been identified by the risk
assessment procedure, will be managed and controlled. (Pg 11 SG) (SU1 Pg 8 Edge Notes)
4 4 ERM is a structured and systematic process that is interwoven with existing management
responsibilities. It provides a framework based on analyzing risks and opportunities, with
an ultimate objective of creating value for the shareholders. (Pg 9 SG) (SU1 Pg 5 Edge
Notes)
5 2 The board’s role is to steer the corporation towards corporate governance
policies that support long-term sustainable growth in shareholder value. (Pg 8 SG) (SU1
Pg 5 Edge Notes)
6 4
, RSK2601 – Memo – May/June 2016 Examination
(Appendix 1 Pg 98 SG)
7 4 Investors are willing to pay a premium for good governance for three reasons.
They believe that the company will perform better over time, which will mean higher
share prices.
It is a way of reducing risk by either avoiding it altogether or by coping better with
adverse events.
The focus on corporate governance is a trend, but the reality is that no one wants to be
left behind.
(Pg 17 SG) (SU2 Pg 11 Edge Notes)
8 2 Attracting lower-cost capital:
o By improving the confidence of domestic and international investor
o Change = constant and corporate managers should continually revise
strategies to meet these changes. (Pg 15 SG) (SU2 Pg 10 Edge Notes)
9 4 The King II Report moved away from the single bottom-line principle (i.e. profit for
shareholders) to a triple bottom-line principle, which takes into account the
environmental, economic and social activities of a company. (Pg 16 SG) (SU2 Pg 11 Edge
Notes)
10 4
11 1 Risk principles (Pg 18 SG) (SU2 Pg 12 & 13 Edge Notes)
