Certified in Risk and Information Systems Control (CRISC) Practice Test

In an organizational context, governance primarily refers to the frameworks, practices, and processes through which a company's board of directors holds itself accountable to stakeholders and investors. This includes establishing a set of roles and responsibilities that outline how decisions are made and how performance is monitored. Good governance ensures that there is transparency, ethical behavior, and accountability at all levels of the organization, which builds trust with stakeholders and can drive long-term success.

The aspect of accountability to stakeholders and investors signifies that governance is not just about internal processes but also about how the organization communicates and reports its performance, decisions, and risks to those with a vested interest. This broader view encompasses financial and non-financial aspects, focusing on the company's commitment to ethical practices, compliance, and transparency.

While creating company policies, managing day-to-day operations, and ensuring compliance with local laws are important functions within an organization, they typically fall under management and operational responsibilities rather than the overarching governance framework that establishes accountability and strategic direction.