Question

A multinational manufacturer operates through highly autonomous regional business units, each with its own management team that makes independent risk decisions. Senior leadership has become concerned that similar risks are being treated very differently across regions, leading to inconsistent controls and unclear enterprise-wide accountability. Which change to the organizational structure would BEST address this concern while preserving regional operational flexibility?

Accepted Answer

Establish a common enterprise risk management framework with defined roles and reporting lines while allowing regions to execute within it

Answer

Centralize all risk decisions at corporate headquarters and remove regional decision-making authority

Answer

Require each regional unit to hire its own independent risk consultants to standardize practices

Answer

Increase the frequency of internal audits across all regions to detect inconsistencies after they occur