Governance and Management: Control, Ethics and Strategy
Core concepts
Governance covers board structure, separation of ownership and control, agency problems, committees (audit, risk, remuneration, nomination), internal control (COSO: control environment, risk assessment, control activities, information and communication, monitoring), and ethics (codes of conduct, conflicts of interest, whistleblowing). Management covers functions (planning, organising, leading, controlling), motivation and leadership theories, and strategy (SWOT, PESTEL, Porter’s five forces, Ansoff matrix).
Traps that appear in questions
- Confusing governance (oversight) with management (execution). The board oversees; executives run the business.
- Assuming the audit committee prepares accounts - it oversees the external audit and internal controls; management prepares accounts.
- Mixing internal control (prevent/detect error and fraud) with internal audit (independent appraisal of controls).
- In ethics questions, choosing the answer that protects the organisation’s reputation over the one that follows the professional code - the code wins.
- In strategy, confusing SWOT (internal/external analysis) with PESTEL (macro-environment).
Worked rule of thumb
For an ethical dilemma, apply this sequence: identify stakeholders → identify the professional code requirement → consider consequences → choose the action that is both lawful and consistent with the code → document and escalate. Example: a manager asks you to delay recognising a liability to hit a target. The code requires fair presentation; you refuse and escalate to the audit committee.
Control
Segregation of duties, authorisation, reconciliation and physical safeguards are classic control activities.