Define and Establish Governance

Governance answers one question: who has the authority to make which decisions, and what happens when a decision exceeds the PM's authority? PMI expects the PM to define this explicitly at project start — a steering committee, a defined escalation path, clear thresholds (e.g., "budget variance over 10% requires sponsor approval") — rather than improvising it mid-crisis.

Governance structures should be proportionate: a small, low-risk internal project doesn't need the same governance overhead as a multi-vendor regulated program. PMI tests this as tailoring — over-engineering governance for a simple project is as wrong an answer as having none for a complex one.

Study focus: know that governance is distinct from organizational structure (functional, matrix, projectized) — governance is about decision authority, structure is about reporting lines, and the exam sometimes conflates them to test whether you can tell them apart.