The Framework of Project Governance

Abstract

Project governance is the establishment of organizational comprehension and circumstances under which delivering and organizing successful projects. Establishing project governance for all projects is an essential element in defining responsibilities and accountabilities in organizational control. Project governance provides a framework for consistent, robust and repeatable decision making which is the governing factor of corporate capital investments. Hence, this offers a structured approach towards assuring businesses to conduct project activities, "business as usual" activities, as well as organizational changes. Project success is the primary objective of all projects; thus the systematic application of suitable methods and a stable relationship with project governance is of vital importance to reach an optimal project success. According to the research article "Project Governance – The Definition and Leadership Dilemma"; a majority of authors on project governance have a background in project management, where they attempt to create the project governance framework through a bottom-up approach. Due to a variety of projects in the industry, the range of stakeholders interest, different values and types, and complexity spectrum, the bottom-up strategy has its limitations when providing concise guidance to managers when executing and enforcing project governance. Based on these observations, the objective of this article sections into three parts; firstly the big idea of project governance will be investigated including the three pillars of project governance. Secondly, practical guidelines of the project governance framework will be illustrated together with the core principles. In conclusion, the structure of limitations concerning the bottom-up approach will be analyzed.

Introduction

Project Context

The elements of the project context include multi-project governance and steering committees, the project management office (PMO), portfolio and programme management, project academy and training programmes, project processes and maturity, as well as learning and attempts to embed project capabilities. According to ISO 21500, governance is the framework by which an organization is directed and controlled.

The Big Idea

Project governance involves the project sponsor, the person who authorizes the project, makes executive decisions, solves problems and conflicts beyond the authority of the project manager. Additionally, the project steering committee or board, which provide senior level guidance to the project, are also involved in the project governance.

Three Pillars of Project Governance

Structure

The structure of project governance refers to the governance committee structure and the project steering committee. The broader governance environment includes various stakeholders and user groups. In some cases, there is a programmed board managing a group of related projects which form a portfolio decision-making group. These committees must lay down policy and procedure in which decision rights and how they relate are clearly documented.

People

The effective structure of the governance committee depends on the people participating in the committees. The nature of the project determines the committee's membership. In regards to programmer and portfolio boards, other factors come into play when determining the memberships which in turn determine which organizational roles should be represented on the committee.

Information

The project manager escalates information that informs decision makers, the governance committee, and consists of regular reports on the project, issues, and risks. These key documents describe the project and the busieness case.

Practical Guidelines

Practical guidelines in relation to the six core principles of project governance.

Limitations

Limitations of the framework will be discussed.