Governance and Management
Domain focus
Governance and Management in CICT tests board accountability, ethical decision-making, internal control and the management functions that turn resources into results.
Core rules and concepts
- Good governance rests on accountability, transparency, fairness and responsibility. The board sets strategy and oversees risk; management runs daily operations.
- Separate the roles of chair and CEO to avoid concentrated power. Use audit, risk and remuneration committees with independent members.
- Internal control has five elements: control environment, risk assessment, control activities, information and communication, and monitoring. Segregation of duties is a key control activity.
- Management performs planning, organising, staffing, directing and controlling. Delegation assigns authority but retains accountability.
- Stakeholders include owners, employees, customers, suppliers, lenders, regulators and the community; balance their legitimate interests.
Worked example
A sales manager can approve discounts, release goods and write off bad debts alone. That combines custody, authorisation and record-keeping, so error or fraud can be hidden. The fix is segregation: a credit controller approves limits, a warehouse releases goods against an approved order, and accounts receivable records the sale. The board’s audit committee monitors exceptions.
Traps
Governance is not the same as day-to-day management; a board that approves every small purchase is overstepping. Compliance with rules is not automatically ethical. Delegation is not abdication: the delegator still answers for the outcome. Do not confuse a policy document with an operating control.