Organizational Governance and Project Governance

Organizational Governance and Project Governance

Good governance is a synonym for ‘good business’, structuring the organization to deliver high levels of achievement on an ethical and sustainable basis

Governance refers to the guidelines, operations, and processes that assist activities in a project, program and portfolio management. In Organizational Project Management, governance ensures management and decision-making considering the strategic execution framework.

There are various types of governance including organizational governance; organizational project management (OPM) governance; and portfolio, program, and project governance. PMBOK 6

Organization Governance

Organizational Governance highlights the significance of concepts such as reliability, transparency, and responsibility in formulating effective governance. It refers to doing appropriate things for the organization in a way that is independent of personal interests. While governance begins at the top, varying existing structures need to ensure that decisions and responsibilities are carried throughout the enterprise. Governance, risk, and compliance are gradually being treated as three important parts of a single cohesive framework with a determination of offering a holistic interpretation of organizational performance. Considering this approach, business risks must be identified, measured, and controlled within the management system while compliance refers to rules and regulations as per industry standards. Organizational Governance adds business value to organizations by enhancing functional decision making and strategic planning.

Organizational governance is typically conducted by a board of directors to ensure accountability, fairness, and transparency to its stakeholders. PMBOK 6

Project Governance

Project governance is:

The set of policies, regulations, functions, processes, and procedures and responsibilities that define the establishment, management and control of projects, programmes or portfolios.

(APM, 2012a, p. 237)
Project and Organizational Governance
(Murray, 2011, p. 6) Essential elements of good project governance

Project Governance is another imperative term used in the project management community. There is an increasing trend, that when a project failure occurs, project governance is often considered the root cause for the unsuccessful executed project. Project governance involves all important elements that make a project successful. Though this is not one size fits all. Project governance needs to be customized to an organization’s specific needs considering the eight components involved i.e. project governance framework, assurance, roles and responsibilities, project management control processes, reporting, meetings, and stakeholder engagement and communication. These components influence how you will develop and implement the governance framework on your project while monitoring and controlling it at the same time.

*According to A Guide to the Project Management Body of Knowledge, project governance is an oversight function that is associated with the organization’s governance model and incorporates the project life cycle. There are two crucial elements that need to be focused on. One is the alignment with the organization’s governance. It’s important to understand the project’s environment and make sure there is a right fit with the recognized organization’s governance. This configuration is a critical factor that must be considered in defining the project governance, stakeholder engagement and communication, and roles and responsibilities. These fundamentals need to be met at the beginning of the project.

Project governance is the framework, functions, and processes that guide project management activities in order to create a unique product, service, or result to meet organizational, strategic, and operational goals. PMBOK 6

Endurance, monitoring, and controlling of the governance plan are another three critical components that come to completion during the project’s lifecycle. The project manager needs to ensure that the governance plan is executed throughout the project and also being monitored and controlled while involving other remaining components for management control processes.

*Establishing project governance is not a simple task. Project governance provides a single point of accountability. The following are four key benefits of project governance:

  • Single point of accountability;
  • Outlines roles, responsibility and relationships among project stakeholders;
  • Issue management and resolution; and
  • Information dissemination and transparent communication.
Organizational Governance and Project Governance
(Adapted from ISO 21500, p. 7, Figure 4)
Project stakeholders

Project Governance and Project Management**

In very basic terms, governance is what governors do, and management is what managers do.

Based on material from Dr Raymond Young:

Project governance occurs mainly outside the traditional boundaries of a project. In general terms, it involves the board of an organisation (or their delegates) and the project sponsor (an executive manager) charged with leading the organisation to above-average performance while taking into account risk.

Project governance is about increasing the success rate of projects. It provides a way for directors and senior management to exercise effective oversight and ensure their strategies are implemented and their benefits realised. Project governance sits above and outside of the project management domain.

Project management, on the other hand, is defined in PMBOK Guide as:

… the application of knowledge, skills, tools and techniques to project activities to meet project requirements. In other words, it involves planning, organizing, monitoring and controlling the project activities in order to accomplish the project requirements.

Further Readings

  1. Pg 545 of PMBOK 6
  2. Project governance and Project Management Office (PMO)
  3. Don’t confuse project governance with project management**
  4. Project and Organizational Governance
  5. Project governance by Alie, S. S. (2015)*

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Mudassir Iqbal, PMPMudassir Iqbal, PMPMudassir Iqbal, PMPMudassir Iqbal, PMPMudassir Iqbal, PMPMudassir Iqbal, PMP

 

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