Core 2 strategy and governance decisions across board oversight, compliance, mission alignment, KPIs, alternatives, and enterprise risk.
Strategy and governance questions ask whether an option fits the entity, its mandate, its stakeholders, and its risk tolerance. Candidates should evaluate governance structure, accountability, compliance, objectives, measures, alternatives, and enterprise risk before recommending an action.
Exam emphasis: 10-30%.
flowchart LR
A["Mandate"] --> B["Governance"]
B --> C["Alternatives"]
C --> D["Risk"]
D --> E["Action plan"]
Use this chapter as the governance-and-fit layer of Core 2. The recurring work is to identify the entity’s objective, evaluate oversight and accountability, test mission fit, compare alternatives, and recommend a risk-aware action plan.
| Section | Main question | Study focus |
|---|---|---|
| 2.1 Governance Structure | Does the governance structure support oversight and stakeholder accountability? | Entity form, board composition, mandate, accountability, stakeholder exposure, and corrective governance action. |
| 2.2 Audit Committee | Is the audit committee equipped to oversee reporting, controls, and risk? | Mandate, independence, financial literacy, auditor access, information flow, and escalation. |
| 2.3 Compliance | Do compliance mechanisms turn policies into reliable behaviour? | Codes, calendars, accountability programs, information flow, ownership, monitoring, and enforcement. |
| 2.4 Mission Alignment | Does the decision fit mission, mandate, values, and sustainable value? | Purpose, stakeholder promises, entity context, short-term tradeoffs, decision criteria, and recommendation fit. |
| 2.5 Objectives & KPIs | Do objectives and KPIs support strategy and action? | Financial and non-financial measures, leading indicators, benchmarks, action plans, data quality, and behaviour. |
| 2.6 Strategic Alternatives | Which alternative best fits strategy, operations, stakeholders, and risk? | External position, internal capability, qualitative and quantitative criteria, implementation, ERM, and monitoring. |
Use each section as a decision unit. Identify the case trigger, build any required comparison, then write the recommendation in management language. Core 2 rewards candidates who connect governance, risk, strategy, stakeholder impact, and operational constraints.
| Trap | Better response |
|---|---|
| Producing a calculation without a decision. | Interpret the result and recommend the action it supports. |
| Listing qualitative factors without ranking them. | Tie each factor to strategy, risk, feasibility, or stakeholder impact. |
| Ignoring implementation. | State the control, KPI, accountability, or follow-up action needed after the recommendation. |