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Does project success rely on good governance?

Nick Pelham & Chris Flaherty
April 20, 2011

What do we mean by governance and by project success? Most projects, even non-complex projects require some form of governing—it can be as simple as having a project manager as the person responsible for the delivery the project.

In addition, there could be a question of what structural processes are in place to allow for good governance such as ensuring there is regular and systematic reporting to the ‘project owner’ on the progress of the project. In the more complex project situations, a project board is put in place and reporting occurs there.

The project manager could also establish a project charter, a guide for the project board to establish the authority and financial responsibilities of the board’s oversight of the project, which includes the level of financial delegations that a project manager has over the particular project and the deliverables the project is to achieve. Project success, however, is not so simple, as there are four different views.

What is project governance?

Scenario: You are about to start a new complex project, the biggest one you have ever run. You have a strong track record in delivering projects. It is no surprise that you know your industry well, and you know about the current practices and trends, and have been to conferences on project management to keep up to date. It is because of this knowledge that you have heard the recent issues being raised about governance. The trouble is, no one can tell you what project governance is or what it does!

Trends in project management are still uncertain because it is a relatively young discipline. Project governance is one of the newest additions to the language used in project management, and it is a rapidly evolving topic.

In most cases, the term governance is being used in relation to describing process, the ‘governing’ issues that surround the initial establishment and operation of a project board. However, a problem being faced by every project manager is the elusive idea of ‘good’ governance, what it is, and what should a project manager be doing or not doing in respect to their project?

The word governance is not new; it has been around longer than the word ‘project’, but it has only been recently used in relation to projects. It is now being identified as one of the root causes for project failure.

Governance can have many different meanings: ranging from the complex process of steering multiple firms and agencies, through to including the responsibilities for defining project success (or more often, avoiding failure).

Lawyers, policy makers and boards of directors seem to understand governance. However, project governance does not have any universally agreed boundaries. For instance, the Association of Project Managers (APM) provides a definition of project governance as the extension of principles of governance in to the management of individual projects.

This is a very broad description, and incorporates many of the elements of a typical project management role, such as reporting. So what then, is new about governance, or are we just re-badging the old?

The origins of project governance

One origin for project governance has been corporations, and corporate law, where legal concepts such authority of making a decision, what facts were used in the decision process, have crept into the realm of project board management.

More general meanings of governance have also appeared in project management, these include:

  • Regulations, proscriptions, injunctions, prescriptions, orders;
  • Economic means, sanctions or incentives; and
  • Information, advice or warnings.
Nick Pelham & Chris Flaherty
Nick Pelham (left) is the head of Gateway at the Department of Treasury & Finance for the Victorian Government.Dr Chris Flaherty (right) is a senior risk consultant at Greymans Limited in London, UK.
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