2025 – S1 – AUI3702 – ASSESSMENT 3 – Q&A
QUIZ
Assessment 3
Started on Saturday, 26 April 2025,
State Finished
Completed on Saturday, 26 April 2025,
Time taken
Grade 50.00 out of 50.00 (100%)
Question 1
Milan Ltd is a company listed on the Johannesburg Stock Exchange (JSE) in the
industrial/mining sector. The board regards sound corporate governance as very
important and has ensured that the company has the necessary structures, policies
and procedures in place. In general, the board follows a policy of delegating duties to
board committees which consist of well qualified and experienced directors.
One of the cornerstones of the company’s corporate governance is the management
of risk. Much attention has been directed at implementing a “risk awareness” culture
into all aspects of the business, and risk evaluation and response is an ongoing
activity.
YOU ARE REQUIRED TO:
Match the correct risk category with the relevant risk response:
Risk categories
• reputational
risk
• sustainability risk
• technology and information risk
• the risk of the unknown
Risk Response
1
,2025 – S1 – AUI3702 – ASSESSMENT 3 – Q&A
• Developing a poor reputation is one of the major risks
faced by a company as it undermines the confidence of
shareholders, financiers and other stakeholders, e.g. a
company with a poor reputation for financial control,
product quality, ethical behaviour etc.
• The concept of integrated thinking advocated by King IV
suggests the board should think carefully about the
reputational consequences of the decisions they take, e.g.
on strategy, and how company personnel and the
company behave and communicate with stakeholders and
the public at large
• Have a significant effect on the economic value of a
company, and the board must be ever vigilant that all the
factors which go into sustaining the company (keeping it
operating properly into the future) are appropriately
managed, e.g. an unethical company will not survive in the
long run, companies which do not manage their impact on
the environment are doomed to failure and companies
which do not keep up with development and technology
will fails
• Is development which meets the needs of the present
without compromising the ability of future generations to
meet their needs, and is a key part of integrated thinking.
• In a large listed company like Milan Ltd, banks, insurance
companies, medical aids, investment companies, this type
of risk is essential in the operation of the business.
Security is of paramount importance, e.g. should a bank
suffer serious violations, chaos in the banking sector would
ensue, and the bank would potentially cease to exist;
nobody would put their money in that bank, other banks
would not engage with it, and there would be huge legal
consequences from investors and others.
2
, 2025 – S1 – AUI3702 – ASSESSMENT 3 – Q&A
• Not all risk is predictable, and the essence of this risk is
that there are political, physical, environmental, economic,
social, technological and trading circumstances which can
change almost instantly and unpredictably. It is obviously
difficult to manage this risk but companies need to realize
this risk is present, try to identify how the company could
be affected and have a plan. Simplistically stated, it
requires that boards of companies engage in “what if …”
debates and discussions e.g. what if the oil price goes to
200 dollars a barrel, or what if there is a political coup in
the country of a major trading partner, what if the company
is consistently attacked on social media.
• The concept of integrated thinking would go some way to
“identify” potential but these risks
Adapted Graded Questions
Feedback
The correct answer is:
Reputational risk → Developing a poor reputation is one of the major risks faced by a
company as it undermines the confidence of shareholders, financiers and other
stakeholders, eg a company with a poor reputation for financial control, product
quality, ethical behaviour etc,
Sustainability risk → Is development which meets the needs of the present without
compromising the ability of future generations to meet their needs, and is a key part
of integrated thinking.,
Sustainability risk → Have a significant effect on the economic value of a company,
3
QUIZ
Assessment 3
Started on Saturday, 26 April 2025,
State Finished
Completed on Saturday, 26 April 2025,
Time taken
Grade 50.00 out of 50.00 (100%)
Question 1
Milan Ltd is a company listed on the Johannesburg Stock Exchange (JSE) in the
industrial/mining sector. The board regards sound corporate governance as very
important and has ensured that the company has the necessary structures, policies
and procedures in place. In general, the board follows a policy of delegating duties to
board committees which consist of well qualified and experienced directors.
One of the cornerstones of the company’s corporate governance is the management
of risk. Much attention has been directed at implementing a “risk awareness” culture
into all aspects of the business, and risk evaluation and response is an ongoing
activity.
YOU ARE REQUIRED TO:
Match the correct risk category with the relevant risk response:
Risk categories
• reputational
risk
• sustainability risk
• technology and information risk
• the risk of the unknown
Risk Response
1
,2025 – S1 – AUI3702 – ASSESSMENT 3 – Q&A
• Developing a poor reputation is one of the major risks
faced by a company as it undermines the confidence of
shareholders, financiers and other stakeholders, e.g. a
company with a poor reputation for financial control,
product quality, ethical behaviour etc.
• The concept of integrated thinking advocated by King IV
suggests the board should think carefully about the
reputational consequences of the decisions they take, e.g.
on strategy, and how company personnel and the
company behave and communicate with stakeholders and
the public at large
• Have a significant effect on the economic value of a
company, and the board must be ever vigilant that all the
factors which go into sustaining the company (keeping it
operating properly into the future) are appropriately
managed, e.g. an unethical company will not survive in the
long run, companies which do not manage their impact on
the environment are doomed to failure and companies
which do not keep up with development and technology
will fails
• Is development which meets the needs of the present
without compromising the ability of future generations to
meet their needs, and is a key part of integrated thinking.
• In a large listed company like Milan Ltd, banks, insurance
companies, medical aids, investment companies, this type
of risk is essential in the operation of the business.
Security is of paramount importance, e.g. should a bank
suffer serious violations, chaos in the banking sector would
ensue, and the bank would potentially cease to exist;
nobody would put their money in that bank, other banks
would not engage with it, and there would be huge legal
consequences from investors and others.
2
, 2025 – S1 – AUI3702 – ASSESSMENT 3 – Q&A
• Not all risk is predictable, and the essence of this risk is
that there are political, physical, environmental, economic,
social, technological and trading circumstances which can
change almost instantly and unpredictably. It is obviously
difficult to manage this risk but companies need to realize
this risk is present, try to identify how the company could
be affected and have a plan. Simplistically stated, it
requires that boards of companies engage in “what if …”
debates and discussions e.g. what if the oil price goes to
200 dollars a barrel, or what if there is a political coup in
the country of a major trading partner, what if the company
is consistently attacked on social media.
• The concept of integrated thinking would go some way to
“identify” potential but these risks
Adapted Graded Questions
Feedback
The correct answer is:
Reputational risk → Developing a poor reputation is one of the major risks faced by a
company as it undermines the confidence of shareholders, financiers and other
stakeholders, eg a company with a poor reputation for financial control, product
quality, ethical behaviour etc,
Sustainability risk → Is development which meets the needs of the present without
compromising the ability of future generations to meet their needs, and is a key part
of integrated thinking.,
Sustainability risk → Have a significant effect on the economic value of a company,
3
