Question 494 - CGEIT discussion

Suggested answer: C

Explanation:

The primary role of the governance function in enabling an enterprise to achieve its businessobjectives is to provide a means to effectively manage stakeholders. Stakeholders are theindividuals or groups that have an interest or stake in the enterprise's activities, outcomes, andperformance. They include shareholders, customers, employees, suppliers, regulators, andsociety at large. Effective stakeholder management involves identifying, engaging,communicating, and satisfying the needs and expectations of the stakeholders in a transparentand ethical manner. By providing a means to effectively manage stakeholders, the governancefunction can help the enterprise to align its vision, mission, strategy, and values with thestakeholder interests, foster trust and collaboration among the stakeholder groups, balance theeconomic and social goals and the individual and communal goals of the enterprise, andenhance the reputation and legitimacy of the enterprise in the market and society.The other options are not as primary as providing a means to effectively manage stakeholdersfor the governance function. Determining risk thresholds that the enterprise can sustain is an important aspect of the governance function, but it is not the primary role. Risk thresholds arethe levels of risk exposure that the enterprise is willing to accept or tolerate in pursuit of itsbusiness objectives. They are derived from the enterprise's risk appetite and risk tolerancestatements, which reflect the enterprise's culture, values, and strategy. The governancefunction can help to define, communicate, and monitor the risk thresholds that the enterprisecan sustain, but this is not its primary role. Preparing business continuity and resiliency plans isa vital responsibility of the management function, not the governance function. Businesscontinuity and resiliency plans are the documents that outline the processes and procedures forensuring the continuity of critical business functions and operations in the event f a disruptionor crisis. They also describe how the enterprise can recover from the disruption or crisis andresume normal operations as soon as possible. The governance function can oversee andapprove the business continuity and resiliency plans prepared by the management function,but this is not its primary role. Monitoring strategic plans to reach the desired target state is akey activity of both the governance function and the management function, but it is not theirprimary role. Strategic plans are the documents that define the long-term goals and objectivesof the enterprise and how they will be achieved. They also specify the resources, actions,measures, and timelines for implementing the strategy. The governance function can set thedirection and scope of the strategic plans, while the management function can execute andreport on them. Both functions can monitor the progress and performance of the strategicplans to reach the desired target state, but this is not their primary role.Reference:=The fivefunctions of governance -- Project Manager,What is a Governance Structure? - ESG | TheReport,Develop an effective governance structure | Australian Public Service Q