CMPE Organizational Governance Practice Test

The board’s role is governance, not daily management. It sets the direction by approving strategy, oversees how risks are identified and managed, ensures accountability to shareholders and other stakeholders, and hires and monitors the top executives who run the organization. To support these responsibilities, boards commonly establish specialized committees that focus on areas requiring careful, ongoing oversight. The two most typical are the Audit Committee and the Risk Committee. The Audit Committee concentrates on financial reporting, internal controls, external audits, and compliance, helping ensure integrity in financial disclosures. The Risk Committee concentrates on the organization’s risk management framework, monitoring major risks, risk appetite, and how those risks are being mitigated. Other options describe responsibilities or committees that aren’t central to standard board governance; day-to-day operations belong to management, and committees like Legal, Marketing, or IT Steering aren’t the primary pair usually cited for governance oversight.