PRMIA Exam 8020 Topic 5 Question 12 Discussion

Actual exam question for PRMIA's 8020 exam

Question #: 12
Topic #: 5

[All 8020 Questions]

Governance can be defined as which of the following?

AGovernance is a structure specifying the daily operation of a firm.

BGovernance is a structure specifying the ways in which reporting is made to the primary regulator.

CGovernance is being replaced by management in all firms that are regulated.

DGovernance is a structure specifying the policies, principles, and procedures for making decisions about corporate direction.

Show Suggested Answer

Suggested Answer: D

Definition of Governance

Governance refers to the framework of policies, principles, and processes used to guide corporate decision-making and strategic direction.

It ensures accountability, transparency, and risk oversight within an organization.

Key Elements of Governance

Risk oversight -- Ensuring risks are properly identified and managed.

Accountability structures -- Defining roles and responsibilities.

Decision-making frameworks -- Establishing policies for long-term corporate success.

Why Other Answers Are Incorrect

Option

Explanation

A . Governance is a structure specifying the daily operation of a firm.

Incorrect -- Governance focuses on high-level corporate oversight, not day-to-day operations.

B . Governance is a structure specifying the ways in which reporting is made to the primary regulator.

Incorrect -- Governance is broader than just regulatory reporting.

C . Governance is being replaced by management in all firms that are regulated.

Incorrect -- Governance and management are separate but complementary; governance provides oversight, while management executes strategy.

PRMIA Reference for Verification

PRMIA 10 Principles of Good Governance

by Izetta at Jul 08, 2025, 07:00 AM

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Milly

2 hours ago

I feel like option C is definitely wrong, but I’m a bit confused about the differences between A and D.

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Ruthann

6 days ago

I remember a practice question that mentioned governance in relation to regulatory reporting, but I’m not sure if that’s the main focus here.

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Herminia

11 days ago

I think governance is more about the overall framework for decision-making rather than just daily operations. So, I’m leaning towards option D.

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Virgilio

17 days ago

Option D looks like the best fit to me. Governance is about the decision-making structure and processes, not just daily operations or reporting.

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Tresa

22 days ago

Governance is an important concept, but the wording of these options is tricky. I'll need to think critically about the nuances of each choice.

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Georgiann

28 days ago

Hmm, I'm a bit unsure about this one. The options seem similar, but I'll try to focus on the key differences to determine the correct answer.

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Samira

1 month ago

This question seems straightforward. I'll read through the options carefully and select the one that best matches the definition of governance.

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Rikki

3 months ago

I think governance is more than just daily operations, so option D makes the most sense to me.

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Cecil

3 months ago

I believe governance also involves reporting to regulators, so maybe option B is correct.

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Ressie

3 months ago

Governance? More like 'govern-TANCE', am I right? Gotta keep those policies in check!

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Margot

3 months ago

Haha, option C is a joke, right? Governance will never be replaced by management, that's like the fox guarding the henhouse!

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Franklyn

1 month ago

D) Governance is a structure specifying the policies, principles, and procedures for making decisions about corporate direction.

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An

2 months ago

B) Governance is a structure specifying the ways in which reporting is made to the primary regulator.

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Jesus

3 months ago

A) Governance is a structure specifying the daily operation of a firm.

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Ronny

4 months ago

I'm going with D. Governance is the backbone that keeps a company on the straight and narrow.

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Tiffiny

4 months ago

Option D sounds right to me. Governance is the guiding structure, not just daily operations or reporting.

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Kelvin

3 months ago

Yes, governance is all about setting the direction and decision-making processes for a company.

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Bulah

3 months ago

I agree, option D seems to be the most comprehensive definition of governance.

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Ahmad

4 months ago

I agree with Essie, governance is all about setting policies and principles.

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Essie

4 months ago

I think governance is about making decisions for the company.

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Devon

4 months ago

Definitely D. Governance is the framework that ensures a company is run responsibly and ethically.

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Gregg

4 months ago

I think D is the correct answer. Governance is all about the policies, principles, and procedures that guide decision-making in a company.

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Beth

4 months ago

I see your point, but I still believe D is the most comprehensive definition of governance.

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Stefania

4 months ago

I think A might also be a good option, as it deals with the daily operations of the firm.

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Rikki

4 months ago

I agree, D is the best choice. It's all about setting the direction for the company.

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