What is project governance?

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Posted on Tuesday, 23rd July, 2019 - 13:52

Project governance keeps projects running smoothly, on budget, with timely deliveries and client satisfaction. To do this consistently, there needs to be an overall framework that oversees the project. This is project governance. But what does it include?

What project governance includes

Project governance is the framework for how project decisions are made. It tells you what activities the organization does, and who’s responsible. Project governance therefore covers all these aspects:

  • Policies
  • Regulations
  • Functions
  • Processes
  • Procedures
  • Responsibilities

The three pillars of project governance

Project governance essentially describes three things:

  1. Structure

The organization’s structure and environment have to support the project. That means senior management is willing to invest time and energy to establish a vision for project managers to take forward. The “structure” element of project governance describes not just the immediate project team, but the company as a whole.

  1. People

Investing in effective project managers is key to any project. But first, senior management needs to understand their current activities. From this, project governance can establish the goals each PM should achieve. These goals need to be clear, reachable and sustainable.

  1. Information

While it’s important to understand people, the process is even more important. Regardless of how many goals are set or what the vision is, every project will suffer without clear and consistent information sharing.

Project governance roles

There are several roles within project governance, including:

Project Owner – this person is front-facing as they represent the business. Therefore, they’re usually not the project manager since they tend to hold the project manager to account.

Key stakeholders – a Project Board made up of key stakeholders. They’re either the people who fund the project, customers of the final product or suppliers. Limit the number of key stakeholders to a maximum of six to keep the process efficient.

Advisory group – where there are many stakeholders, forming a larger advisory group keeps them within the project without making decision-making cumbersome or inefficient. This is more of a forum than a Project Board.

Keep the project board separate from “business as usual”. This keeps the project responsive, so it can continue without needing every project decision to be sanctioned from higher up. The Project Owner can handle day-to-day decision making without everyone’s approval.

The project governance model

The governance model has to complement the organization. That’s why the project manager needs to consider the amount of rigour to incorporate. When project governance is overzealous, it can annoy stakeholders. When the opposite is true, and governance is too slack, there can be a lack of stakeholder engagement, or the risk of false escalations.

Use the project’s scope, timeline, complexity, risk, stakeholders and their importance to the organization. With this, you can establish a baseline that contains all the key elements required for project governance.

The Project Owner retains control of the business case and budget. So the model should go:

  • Portfolio Board – approves the release of funds
  • Project Board – gives approval for key documents
  • Project Manager – responsible for day-to-day decisions that do not impact the business case

And finally, there is the project team, who deliver the project as per the vision set out for them. With a strong, robust project governance model in place, the overall framework of the project should maximize success.