Governance of Enterprise IT (CGEIT) Certification Practice Exam

Why has IT Governance become a focus for Boards of Directors and Executives?

1. Reduction in Technology Costs

2. Market Value Shift from Tangible to Intangible Assets

3. Need for More Technical Skills in Leadership

4. Enhanced Employee Satisfaction with IT

The correct answer is: Market Value Shift from Tangible to Intangible Assets

IT Governance has gained significant attention from Boards of Directors and Executives primarily due to the shift in market value from tangible to intangible assets. This transition means that the value of a company's assets is increasingly derived from elements such as knowledge, brand reputation, and customer relationships, rather than just physical assets like machinery or inventory. As technology becomes integral to maintaining and enhancing these intangible assets, effective IT governance is essential to align IT strategies with business objectives, manage risks, and ensure that investments in technology deliver maximum value. By focusing on governance, organizations can establish frameworks and processes that make it easier to manage the resources and capabilities that contribute to intangible value. This also helps in compliance with regulations and enhances accountability, which Board members and executives find critical in safeguarding stakeholder interests. The increasing complexity of managing information technology and the risks associated with it further necessitates a structured approach, emphasizing why IT governance is a priority for leadership teams.