How does portfolio management support effective corporate governance?

Question

Options

• AControls the major changes to business as usual
• BClarifies responsibility and accountability for making decisions on which programmes and projects
• CEnsures that the organization's change initiatives represent the optimal allocation of limited
• DProvides a means by which the link between strategy and resource allocation can be maintained

• A
  14% (5)
• B
  3% (1)
• C
  8% (3)
• D
  75% (27)

Explanation

Portfolio management supports effective corporate governance primarily by maintaining the vital link between an organization's strategic objectives and how resources are actually allocated - ensuring that investment decisions reflect strategic priorities rather than ad hoc choices.

Why the distractors are wrong:

• A is incorrect because controlling changes to business-as-usual is a change management or operations concern, not a governance function of portfolio management.
• B describes a role closer to a governance framework or RACI model - clarifying decision rights is a broader governance mechanism, not specific to portfolio management's contribution.
• C sounds plausible but describes an outcome (optimal allocation) rather than the governance mechanism portfolio management provides - it's also incomplete as written.

Memory tip: Think of portfolio management as the "strategy-to-spend bridge" - governance is about accountability and control, and portfolios govern which initiatives get funded, keeping spending aligned with strategy. If the answer mentions the word "strategy" alongside "resource allocation," that's your signal.

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