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PRINCE2F PRINCE2 Practices Practice Question

What does the 'management by exception' principle in PRINCE2 mean?

⚠ Common exam trap

PRINCE2F often tests the misconception that management by exception means the Project Board is uninvolved or that the Project Manager has unlimited autonomy, when in fact it is a tightly bounded delegation triggered by forecast tolerance breaches.

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

✓

The Project Board sets tolerances and only reviews the project if tolerances are forecast to be exceeded

Management by exception in PRINCE2 delegates day-to-day decision-making to the Project Manager within agreed tolerances set by the Project Board. The Board only intervenes when the Project Manager forecasts that a tolerance (time, cost, scope, quality, risk, benefit) will be exceeded, at which point an Exception Report is escalated. This keeps senior stakeholders focused on strategic oversight rather than routine operational detail.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✓

    The Project Board sets tolerances and only reviews the project if tolerances are forecast to be exceeded

    Why this is correct

    Management by exception delegates day-to-day decisions to the Project Manager within agreed tolerances. The Project Board defines those tolerances for scope, time, cost and benefits, and only intervenes with a decision when forecasts indicate a tolerance will be exceeded.

  • ✗

    The Project Manager must report all decisions to the Project Board immediately

    Why it's wrong here

    Management by exception means the Project Board is informed only when tolerances are forecast to be breached, not on every decision. It is tempting because escalation to the Board does occur, but routine reporting of all decisions would defeat the principle's purpose of freeing senior management from day-to-day involvement.

  • ✗

    The Project Board makes all decisions for the project

    Why it's wrong here

    Management by exception delegates tolerance-bounded decisions to the Project Manager, escalating only breaches; the Project Board does not decide everything. It is tempting because the Board sets tolerances and owns exception decisions, but that role would describe a Board-centric approval model, not this principle.

  • ✗

    The Project Manager can ignore plans and work independently

    Why it's wrong here

    Management by exception still requires the Project Manager to work within the agreed plan and tolerances, escalating forecast breaches; ignoring plans contradicts PRINCE2. It is tempting because the Project Manager does receive delegated authority to proceed without seeking approval, but that autonomy is bounded, not independent of planning.

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Last reviewed September 2026 · checked against the official PeopleCert exam blueprint

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