Final answer:
Option c, defining the organization's risk appetite, is not a key responsibility of the board of directors in setting a proper tone at the top.
Step-by-step explanation:
The key responsibility of the board of directors in setting a proper tone at the top is not mentioned in option c, which is defining the organization's risk appetite.
Option a, taking responsibility for the success/failure of the firm, is a key responsibility as it ensures accountability at the top level. Option b, providing expert advice, counsel, and direction on regulatory compliance matters, is another key responsibility as it ensures adherence to laws and regulations. Option d, approving policies, is also a key responsibility as it establishes guidelines for the organization.
However, they do not directly take responsibility for the company's operational successes or failures, which are typically handled by company executives and management teams. While directors may influence the selection of executives and guide through expertise and policy, the practical management accountability resides with the company's executives.