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CISM Practice Question: BankOne has a mature security governance program…
BankOne has a mature security governance program but recently failed a regulatory audit because the board had not formally approved the risk appetite statement. The CISO argues that risk appetite is reviewed annually and was verbally approved. To prevent recurrence, what governance change is most effective?
⚠ Common exam trap
Watch out — candidates often confuse operational improvements (like automating monitoring or reducing indicators) with governance-level fixes, failing to recognize that the audit failure was due to a lack of formal, documented board approval, not a deficiency in the monitoring or reporting process.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Require board resolution for risk appetite annually
The core issue is the lack of formal, documented board approval of the risk appetite statement, which is a governance requirement. A formal board resolution, passed and recorded annually, creates an auditable record that satisfies regulatory scrutiny and ensures the board's explicit ownership of risk tolerance. This directly addresses the audit failure by moving from informal verbal approval to a legally binding, documented governance process.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Automate risk appetite monitoring
Why it's wrong here
Automating monitoring detects drift against a statement that still lacks board approval, leaving the audit finding unresolved. It is tempting because continuous monitoring is a genuine governance control, and would be correct once an approved risk appetite exists and you need assurance that exposures stay within it.
- ✗
Reduce the number of risk indicators
Why it's wrong here
Reducing risk indicators narrows measurement coverage without producing the board's formal approval, so the audit gap persists. It is tempting because trimming metrics is a real governance activity, and would be correct when indicators are excessive or misaligned with strategy after the appetite statement is properly ratified.
- ✗
Document all board approvals in minutes
Why it's wrong here
Minutes record that approval occurred but do not establish the formal, documented risk appetite statement the regulator requires. The gap is the absence of a board-approved artefact, not evidence of discussion. Minutes would suffice for recording other decisions, yet here they leave the underlying governance deficiency unresolved.
- ✓
Require board resolution for risk appetite annually
Why this is correct
A board resolution creates a formal, auditable record of approval, satisfying the regulatory requirement that the board itself owns risk appetite. Annual review alone lacks documented authority, so mandating resolution closes the governance gap the audit identified.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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