Internal control mechanisms: estabilishing lines of responsibility (who is in charge), authority and communication, governance has a lot to do with the hierarchy in each company, how each level will share/communicate issues with other levels. Homogeneity in it among levels of hierarchy. It is the physical separation b/w owners of a company and its managers (or agents). It provides those managers the opportunity to act in ways that are advantageous to themselves but bad for interest owners: what are certain control and monitoring systems to promote conformance (and reduce agency problem) Board of directors to see org strategies, structures and systems on behalf of shareholders. Value management systems ensure commitment to core organizational values and corp culture. Risk management systems shows acceptable/unacceptable risks and stds of business conduct. Strategic control systems focus and communicating and implementing the org strategy: what is the purpose of it governance.