The Value of Governance of Project Management (GoPM)
Corporate Governance responsibilities define executive accountabilities and responsibilities for the management of the performance of an enterprise. Following well-publicised events in recent times, the responsibilities of Corporate Executives towards Governance have been extended, for example in the area of provision of corporate performance information, especially financial.
Governments and regulatory authorities have amended laws and strengthened codes and regulations, 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 information and Corporate Governance.
Other areas also relate these responsibilities 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.
Project Governance is not project management. It applies the principle of Governance to the management of projects by providing oversight of projects at the business or executive level, for example via Business Reviews of Projects. Today, many organisations are developing ‘Project Governance’ models, which look to apply oversight in a highly practical way.
Such models can also address responsibilities for strategic decision-making for an important project. This can be particularly useful to processes such as change control. When implemented well, it can have a very positive effect on the quality and speed of decision making on significant issues.
So, what should effective Governance achieve? One important example would be: no project that is clearly exhibiting commonly accepted characteristics of 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.
It is also argued, that since Corporate Governance now places responsibilities on Boards to monitor Enterprise performance, there is a further responsibility at the corporate level 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 failure.
The following table demonstrates a number of key relationships between Project Governance and other Project Management Processes:
- Achievement of Strategic Objectives: The Management of Strategic Projects – Benefits Realisation.
- Accountabilities: Project Sponsorship & Organisation.
- Performance Mgmt & Controls: using metrics such as earned value.
- Effective use of Corporate Resource: via the use of Portfolio Management.
- Enterprise Risk Management: the effective management of project risk.
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