Project governance is the management framework within which project decisions are made.

Project governance is a critical element of any project since while the accountabilities and responsibilities associated with an organization·s business as usual activities are laid down in their organizational governance arrangements, seldom does an equivalent framework exist to govern the development of its capital investments (projects). For instance, the organization chart provides a good indication of who in the organization is responsible for any particular operational activity the organization conducts. But unless an organization has specifically developed a project governance policy, no such chart is likely to exist for project development activity. Therefore, the role of project governance is to provide a decision making framework that is logical, robust and repeatable to govern an organization·s capital investments. In this way, an organization will have a structured approach to conducting both its business as usual activities and its business change, or project, activities. Three pillars of project governance The decision making framework is supported by three pillars: y Structure

This refers to the governance committee structure. As well as there being a Project Board or Project Steering Committee, the broader governance environment may include various stakeholder groups and perhaps user groups. Additionally, there may be a Program Board, governing a group of related projects of which this is one, and possibly some form of portfolio decision making group. The decision rights of all these committees and how they relate must be laid down in policy and procedural documentation. In this way, the project·s governance can be integrated within the wider governance arena. y People

The effectiveness of the committee structure is dependent upon the people that populate the various governance committees. Committee membership is determined by the nature of the project - other factors come into play when determining membership of program and portfolio boards - which in turn determine which organizational roles, should be represented on the committee. y Information

This concerns the information that informs decision makers and consists of regular reports on the project, issues and risks that have been escalated by the Project Manager and certain key documents that describe the project, foremost of which is the business case. Core project governance principles Project governance frameworks should be based around a number of core principles in order to ensure their effectiveness. Principle 1: Ensure a single point of accountability for the success of the project The most fundamental project accountability is accountability for the success of the project. A project without a clear understanding of who assumes accountability for its success has no clear leadership. With no clear accountability for project success, there is no one person driving the solution of the difficult issues that beset all projects at some point in their life. It also slows the project during the crucial project initiation phase since there is no one person to take the important decisions necessary

This is the second principle of effective project governance. post-project. the focus is on the capital cost of the asset and operational costs become a secondary consideration as doe·s serviceability of the outcome. The corollary to this is that the ownership of the project does not reside with those delivering the asset. it never-the-less is in the role of primary project decision maker. those it does make are often ill considered because of the particular group dynamics at play. A service delivery focus also recognizes that at commissioning the asset must integrate into the existing service regime. When numbers increase. Many of those present attend not to make decisions but as a way of finding out what . The concept of a single point of accountability is the first principle of effective project governance. There are two aspects to this. it is not enough to nominate someone to be accountable ² the right person must be made accountable. they tend to morph into stakeholder management groups. the detailed understanding of each attendee of the critical project issues reduces. as detailed in the business case. The organization chart is normally sufficient to identify who in the organization is accountable for the delivery of the service that the project will enable. Beyond this however is the fact that the right person from the correct area within the organization be held accountable. Principle 3: Ensure separation of stakeholder management and project decision making activities The decision making effectiveness of a committee can be thought of as being inversely proportional to its size. The only sure method of ensuring project outputs meet service delivery needs is for ownership of the project and its business case to reflect service delivery ownership. For instance. On the other hand if a project is viewed as delivering an asset. to be met in full. Projects have many stakeholders and an effective project governance framework must address their needs. the project is no better placed than if no one was accountable for its success. It is important that the project owner. The single person who will assume accountability for the success of the project is the subject of Principle 2. It is therefore critical that the assets delivered by the project meet the service delivery needs of the organization. albeit supported as necessary by project delivery specialists. The accountable person must hold sufficient authority within the organization to ensure they are empowered to make the decisions necessary for the project·s success. However. The next principle deals with the manner in which this should occur. is as close to the service being delivered as possible. This ensures the project governance framework maintains a service delivery focus. While the asset may be central to the provision of the services. While the business may be unable to deliver the project without assistance. it does not in itself constitute the service. If the project outputs do not support service delivery needs. If the wrong person is selected. This approach places the business at the heart of project delivery. a service delivery focus necessitates a whole-of-life cost perspective since the service itself will have an associated ongoing. Not only can large committees fail to make timely decisions. As project decision making forums grow in size. The intention therefore is to determine the ownership of the project by identifying the owner of the service the project will deliver. in their service delivery role. the project has to some degree failed ² it has not achieved optimum value for money. operational cost. This concept has implications in important aspects of the project. Principles 1 and 2 are focused on the project's major stakeholder ² the owner of the project.to place the project on a firm footing. Principle 2: Service delivery ownership determines project ownership Organizations deliver services and utilize assets as platforms for the delivery of these services.

Not only is there insufficient time for each person to make their point. If this separation can be achieved.is happening on the project. Project governance structures overcome this by drawing the key decision makers out of the organization structure and placing them in a forum thereby avoiding the serial decision making process associated with hierarchies. Projects require flexibility and speed of decision making and the hierarchical mechanisms associated with organization charts do not enable this. Adoption of this principle will minimize multi layered decision making and the time delays and inefficiencies associated with it. This is the third principle of effective project governance. What should be avoided is the situation where the decisions of the steering committee or project board are required to be ratified by one or more persons in the organization outside of that project decision making forum. are essential to the success of the project. This ensures that stakeholders have the project owner (or SRO) to champion their issues and concerns within the Project Board. . There is always the concern that this solution will lead to a further problem if disgruntled stakeholders do not consider their needs are being met. project decision making and stakeholder m anagement. It is recognized that the organization has valid requirements in terms of reporting and stakeholder involvement. The issue is that they are two separate activities and need to be treated as such. Hence. Principle 4: Ensure separation of project governance and organizational governance structures Project governance structures are established precisely because it is recognized that organization structures do not provide the necessary framework to deliver a project. It will ensure a project decision making body empowered to make decisions in a timely manner. It will need to capture their input and views and address their concerns to their satisfaction. This can be achieved in part by chairing of any key stakeholder groups by the chair of the Project Board. the project governance framework established for a project should remain separate from the organization structure. large project committees are constituted more as a stakeholder management forum than a project decision making forum. This is a major issue when the project is depending upon the committee to make timely decisions. Whatever stakeholder management mechanism that is put in place must adequately address the needs of all project stakeholders. Consequently. There is no question that activities. to all intents and purposes. This is the final principle of effective project governance. However dedicated reporting mechanisms established by the project can address the former and the project governance framework must itself address the latter. it will avoid clogging the decision making forum with numerous stakeholders by constraining its membership to only those select stakeholders absolutely central to its success. Further not all present will have the same level of understanding of the issues and so time is wasted bringing everyone up to speed on the particular issues being discussed. but those with the most valid input must compete for time and influence with those with only a peripheral involvement in the project.

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