Governance arrangements are key to the performance and conduct of any organisation. Things are (or should be) no different in a ‘project organisation’. The bringing together of resources and expertise may be transient, but it is no less vital that proper governance arrangements are put in place to inform and mandate the conduct of participants
The Organisation for Economic Co-operation and Development (OECD) advises:
Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring”
“OECD Principles of Corporate Governance”
Meanwhile, The Association for Project Management in the seventh edition of its Body of Knowledge defines governance as:
the framework of authority and accountability that defines and controls the outputs, outcomes and benefits from projects, programmes and portfolios. The mechanism whereby the investing organisation exerts financial and technical control over the deployment of the work and the realisation of value”
“APM Body of Knowledge Seventh Edition”
Amongst other things, therefore, a well-governed project should adhere to the following principles by having:
- A project board
- A project sponsor
- Defined roles and responsibilities
- Disciplined governance arrangements backed up with a supportive culture, appropriate methodologies, necessary resources and effective controls
- Coherence between the project and the business strategy
- An approved project plan supported by a business case
- Authorisation points for decision-making
- Appropriately delegated / mandated participants
- Independent scrutiny/assurance arrangements
- Defined criteria for project status reporting; risk and issue escalation
- Frank and effective disclosure of project management information
- Effective engagement of interested parties (hitherto often referred to as ’stakeholders’)
Mapping of APM and PRINCE2TM Recommendations
The governance of project management concerns those areas of corporate governance that are specifically related to project activities. Effective governance of project management ensures that an organisation’s project portfolio is aligned to the organisation’s objectives, is delivered efficiently and is sustainable. Governance of project management also supports the means by which the corporate board and other major project stakeholders are provided with timely, relevant and reliable information
| APM’s Governance Principles | Addressed by PRINCE2TM |
| The board has overall responsibility for governance of project management | This governance principle relates to the main board of the corporate organisation and is outside the scope of PRINCE2TM |
| The roles, responsibilities and performance criteria for the governance of project management are clearly defined | Partially addressed. The project has clearly defined roles, responsibilities and performance criteria for governance, but PRINCE2TM does not extend into the governance responsibilities of the corporate roles |
| Disciplined governance arrangements, supported by appropriate methods and controls, are applied throughout the project life-cycle | Fully addressed |
| A coherent and supportive relationship is demonstrated between the overall business strategy and the project portfolio | Partially addressed. Each PRINCE2TM project should demonstrate alignment to corporate strategy through its Business Case PRINCE2TMdoes not provide guidance on portfolio management |
| All projects have an approved plan containing authorisation points at which the Business Case is reviewed and approved. Decisions made at authorisation points are recorded and communicated | Fully addressed |
| Members of delegated authorisation bodies have sufficient representation, competence, authority and resources to enable them to make appropriate decisions | Partially addressed. PRINCE2TM provides the framework for effective delegation. The competence of project personnel is outside the scope of PRINCE2TM |
| The project Business Case is supported by relevant and realistic information that provides a reliable basis for making authorisation decisions | Fully addressed |
| The board, or its delegated agents, decide when independent scrutiny of projects and project management systems is required, and implement such scrutiny accordingly | Partially addressed. PRINCE2TM recommends independent scrutiny by corporate management as part of the Project Assurance responsibilities |
| There are clearly defined criteria for reporting project status and for the escalation of risks and issues to the levels required by the organisation | Fully addressed |
| The organisation fosters a culture of improvement and of frank internal disclosure of project information | Partially addressed. PRINCE2TM encourages open reporting through its management-by-exception and assurance structures |
| Project stakeholders are engaged at a level that is commensurate with their importance to the organisation and in a manner that fosters trust | Fully addressed |
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