Practice Test

True/False: A governance model in portfolio management includes elements like steering committees, governance boards, policies, and decision-making roles.

  • Answer: True

Explanation: The structure of the governance model includes numerous elements, including steering committees, governance boards, policies, and decision making roles, which collectively aim to support effective decision making and achieve strategic goals.

The steering committee’s primary function in governance structure is:

  • a) Marketing
  • b) Sales
  • c) Finance management
  • d) Ensuring strategic alignment

Answer: d) Ensuring strategic alignment

Explanation: The steering committee ensures that the project or portfolio aligns with the organization’s strategic goals and objectives, making strategic alignment their primary function.

True/False: The rights and authorities in a governance model remain constant and do not change with strategic goals.

  • Answer: False

Explanation: The rights and authorities in a governance model are dynamic and can change according to the strategic goals of the organization.

The aim of setting up a governance model is to:

  • a) Promote decision making
  • b) Sell products
  • c) Increase employee morale
  • d) Limit organizational growth

Answer: a) Promote decision making

Explanation: The purpose of a governance model is to support effective decision making and help achieve strategic goals, not to limit growth or enhance staff morale.

True/False: Steering committees in a governance model are responsible for tactical decision-making.

  • Answer: True

Explanation: Steering committees play an important role in tactical decision-making, ensuring the alignment of projects with strategic objectives and overall business goals.

Setting up a governance board is optional in creating a governance model.

  • a) True
  • b) False

Answer: b) False

Explanation: A governance board is a crucial component of a governance model. It oversees the overall running of the organization, making crucial decisions and setting policies.

When establishing a governance model, one of the factors to consider is:

  • a) Employee motivation
  • b) Stock price
  • c) Decision-making roles and responsibilities
  • d) None of the above

Answer: c) Decision-making roles and responsibilities

Explanation: When establishing a governance model, the focus goes beyond finances and staff morale, emphasizing the roles, authorities, and decision-making responsibilities that drive organizational success.

True/False: In a portfolio structure, a governance board is synonymous with a steering committee.

  • Answer: False

Explanation: In a portfolio structure, a governance board and a steering committee have distinct roles. A governance board oversees the entire organization, while a steering committee ensures alignment of projects with strategic objectives.

Decision making in a governance model:

  • a) Is exclusively carried out by the management
  • b) Is the responsibility of the entire organization
  • c) Is solely based on experience
  • d) Is usually outsourced to external consultants

Answer: b) Is the responsibility of the entire organization

Explanation: Decision making in a governance model is distributed across various roles and responsibilities, and is not strictly confined to the management.

True/False: Governance models recommend decision-making rights and authorities to people based on their job titles.

  • Answer: False

Explanation: It’s not about job titles or hierarchy in the organization, but rather roles and responsibilities. The aim is to streamline decision making to effectively support the achievement of strategic goals.

Interview Questions

What is the importance of defining and establishing a governance model for portfolio management?

Establishing a governance model in portfolio management helps in ensuring that appropriate decision-making structures, processes, and controls are in place to guide the achievement of strategic goals and objectives.

What are the key components of a governance model in portfolio management?

The key components of a governance model in portfolio management include the structure (e.g., steering committees, governance boards), policies, decision-making roles, responsibilities, rights, and authorities.

What is the role of steering committees in a governance model for portfolio management?

Steering committees play a crucial role in providing strategic direction, oversight, and decision-making guidance for the portfolio management process.

What is the function of governance boards in a portfolio management governance model?

Governance boards are responsible for reviewing and approving key portfolio decisions, ensuring alignment with strategic objectives, and monitoring portfolio performance.

How do policies contribute to effective governance in portfolio management?

Policies help in setting clear guidelines, standards, and rules for portfolio management activities, ensuring consistency, compliance, and accountability.

What are the responsibilities of decision-making roles within a governance model for portfolio management?

Decision-making roles are responsible for making informed decisions, prioritizing portfolio initiatives, allocating resources effectively, and managing risks to achieve strategic goals.

How do rights and authorities impact decision-making in portfolio management governance?

Rights and authorities define the level of decision-making power, approval processes, and accountability within the portfolio management framework, enabling efficient and effective governance.

Why is it essential to align the governance model with organizational strategic goals in portfolio management?

Aligning the governance model with organizational strategic goals ensures that decision-making processes and structures support the achievement of desired outcomes and contribute to overall success.

How can effective governance support the realization of strategic goals in portfolio management?

Effective governance provides the necessary oversight, direction, and control mechanisms to ensure that portfolio initiatives are aligned with strategic objectives, risks are managed, and resources are optimized for success.

What role does the governance model play in enhancing stakeholder engagement and communication in portfolio management?

The governance model facilitates stakeholder engagement by defining communication channels, decision-making processes, and roles/responsibilities, ensuring transparent and inclusive participation in portfolio activities.

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