Project Governance

Governance of Project Management (GOPM)

Relationship to Corporate Governance

Corporate Governance relates to accountabilities and responsibilities for the management of the performance of an enterprise. Following recent well-publicised events, Directors responsibilities of Governance have been extended, for example, in the area of provision of corporate performance information, particularly financial.

Governments and regulatory authorities have amended laws and strengthened codes, to make responsibilities of Governance more explicit, and to introduce new requirements and standards relating to the production of financial and other data. In many organisations, this will include project data, creating a direct link between key project management information and Corporate Governance.

Other areas also relate Corporate Governance directly to Projects, e.g.:

• Use of Corporate Resource: modern rules of Governance require controls to ensure effective use of Corporate Resource
• Risk: Sarbanes Oxley, for example, requires that organisations implement an ‘Enterprise Risk Management Framework', as a key element of Corporate Governance. Few areas of business carry more risk than projects.

What is Project Governance?

Project Governance extends the principle of Governance into both the management of individual projects via Governance structures, and the management of projects at the business level, for example via Business Reviews of Projects. Today, many organisations are developing models for ‘Project Governance Structures', which can be different to a traditional Organisation Structure in that it defines accountabilities and responsibilities for strategic decision-making across the project. This can be particularly useful to project management processes such as change control and strategic (project) decision-making. When implemented well, it can have a significantly positive effect on the quality and speed of decision making on significant issues on projects.

What should it achieve?

So, what should effective Governance achieve? One important example would be: no project that is clearly exhibiting commonly accepted characteristics of project failure should be allowed to proceed to their next phase without clear resolution of those issues. In many organisations today, this would be an important step up in their competence at managing internal corporate or business projects.

Business Assurance of Projects

It is also argued, that since Corporate Governance now places responsibilities on Boards to monitor Enterprise performance, there is a further responsibility of 'Governance of Project Management'. This encompasses the need to control and demonstrate:

• assurance that projects are being managed well and in accordance the requirements of Governance across the Enterprise;
• assurance that portfolio management is optimising the return from corporate resource and maintaining alignment with strategic objectives;
• assurance that strategic projects are not exhibiting (well publicised) conditions of project failure.

Relationships with other Processes

The following table demonstrates a number of key relationships between Project Governance and Project Management Processes:

• Achievement of Strategic objectives: The Management of Strategic Projects - Benefits Planning & Management
• Accountabilities: Project Sponsorship & Governance; Benefits Planning & Management
• Performance Mgmt & Controls: Project Performance Measurement
• Effective use of Corporate Resource: Portfolio Management
• Enterprise Risk Management: Project Risk Management

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