Which of the following best describes the responsibilities of the board concerning risk management?

The responsibilities of the board concerning risk management primarily entail providing oversight and strategic direction. This involves ensuring that a robust risk management framework is established and maintained within the organization, and that there are processes in place to identify, assess, and manage risks effectively.

By focusing on oversight and strategic direction, the board ensures that risk management is aligned with the organization's overall objectives and strategies. This strategic governance role is crucial because it sets the tone for the organization's risk culture and informs how risks are communicated and handled throughout the organization.

In contrast, day-to-day management of risks is typically the responsibility of management, not the board. Conducting specific audits of risks falls under the domain of internal audit, which reports to the board but does not typically involve the board directly in the audit process. Similarly, the implementation of audit recommendations is usually carried out by management based on the findings provided by the internal audit function rather than being a direct responsibility of the board. Thus, oversight and strategic direction reflect the active role that the board must play in shaping the organization’s approach to risk management.