Project Governance Dr. David Wilson Mr. Doug Connell Master Research Australasia Pty Ltd
Research Objective To understand the nature of project governance, its evolution, how it is related to project management and the trends in project management.
Definition Based on the interviews and literature review conducted for the research Project governance is a framework that sets out the structure, resources, communication, reporting and monitoring systems to manage a project consistent with an organisations corporate or strategic vision.
Sir Adrian Cadbury Governance is a word with a pedigree that dates back to Chaucer and in his day the word carried with it the connotation wise and responsible which is appropriate. It means either the action of governing or the method of governing and it is in the latter sense it is used with reference to companies... A quotation which is worth keeping in mind in this context is: He that sits quietly at the stern and scarce is seen to stir.
Etymology of Governance Governance comes from the Greek To steer To guide
A synthesis of two knowledge domains Project Management Corporate Governance Project Governance
Research design Literature review project management and corporate governance Project management has two significant journals International Journal of Project Management Project Management Journal Interviews with 16 project managers developed into 11 case studies
The Interviews Characteristics of a successful project? Trends in project management? Role of governance in project management?
Characteristics of a successful project Project managed as a team no one individual responsible Good communication within the team and between all players in the project Establishment of a project management office (PMO)
Other characteristics Risk management and acceptance The ability of the project manager to make changes to ensure deliverables were met Manage to milestones not details Standardised project terminology Regular meetings of the Project Management Office and project steering committee Most effort occurs in the planning stage Executive buy in Delivered business expectations
Trends in project management Focus on meeting client expectations Reduction in emphasis on iron triangle or architects triangle Governance Management of the interface between suppliers and contractors Involvement of stakeholders Projects being increasingly managed by professionally qualified project managers rather than architects or engineers Alignment of projects with the overall business strategy
Trends in project management From existing practice To future practice 1 Life cycle model of projects Complexity of projects question relevance of life cycle model 2 Projects as instrumental processes Projects as social processes 3 Product creation focus Value creation focus 4 Narrow concept for projects Broader conceptualisation of projectsmultidisciplinary 5 Practitioners as trained technicians Practitioners as reflective practitioners learning models
Role of governance in project management Development and management of processes Guidelines and procedures Manage risk Manage change proposals Monitor and report on governance processes to ensure compliance Ensure projects on track to meet desired outcomes Appropriate levels of resources are allocated Definite levels of reporting Provide an overview or map of agreed process for completing a project Adhering to guidelines and procedures Full transparency Project structure Objective oversight
Gender M/F Profession Experience Title 1 F Civil Engineering / Academic 2 F Architect and Project Management Systems Engineering- gas and fuel, waste water treatment Information Systems Telco. Civil Engineer Project Manager 3 F Procurement Government Manager/Analyst 4 M Academic Corporate Governance Research Fellow 5 M Information Systems Information Systems Project Manager 6 M Civil Engineer Construction - engineering 7 M Town Planner Land-use and development Director and project manager Director / strategic planner 8 M Mechanical Engineer Materials Handling Project Manager 9 M Information Systems Information Systems Project Manager 10 M Postal Systems Major Projects Director Interviews Conducted in Victoria and NSW Dr. Peter Verhezen Governance Expert - Advisor 11 M Economist Government Analyst project review 12 M Finance Government Director 13 M Project Manager Project Management Director and project manager 14 M Economist Government Director 15 M Government / Finance Government Director 16 M Civil Engineer Government/Private Sector Director and Project Manger
World s best practice on governance Lay solid foundations for management and oversight Recognise and publish the respective roles and responsibilities of board and management. Structure the board to add value Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties. Promote ethical and responsible decision-making Actively promote ethical and responsible decision-making. Safeguard integrity in financial reporting Have a structure to independently verify and safeguard the integrity of the company s financial reporting. Make timely and balanced disclosure Promote timely and balanced disclosure of all material matters concerning the company. Report the rights of shareholders Respect the rights of shareholders and facilitate the effective exercise of those rights. Recognise and manage risk Establish a sound system of risk oversight and manage and internal control. Encourage enhanced performance. Fairly review and actively encourage enhanced board and management effectiveness. Remunerate fairly and responsibility Ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to corporate and individual performance is defined. Recognise the legitimate interests of stakeholders Recognise the legal and other obligations to all legitimate stakeholders.
Project Governance Construction Information systems
Generic Project Governance Model Governance Cabinet Responsible Minister Secretary or Deputy Secretary of Department Communication between Minister and Project Manager must be quick and direct. Steering Committee Project Managers
project governance needs to determine the following Set strategic direction. Set and monitor levels of performance especially related to public sector accountability. Provide finance and control financial returns. Provide technical expertise through centres of excellence. Provide an audit function. Control risk exposure.
What to ask as a member of a governance committee - basics Time Forecast Completion Detail % to complete End Date Planned % Actual Planned Actual Cost cash-flow to date Final Forecast Cost Planned $X Actual $Y Planned $X Actual $Y What are the current risks and Issues? How will the risks and issues be Mitigated? Who is responsible?
Governance Cycle Crisis / problem / Need for solution Project Concept Selection of Board To manage project Initial meeting and briefing Set procedures Monthly meetings Project Completion Review governance process
Meta Questions Why is this project being developed? What are the project objectives these include time and cost but are broader and relate to the reason for the project? What problem is being solved? What is being improved What is the political reality or political environment within which the project will exist? What strategies are in place to manage the politics that will invariably exist?
More questions Is a total cost approach being used in the evaluation or selection process? Total cost includes not only the economic costs but triple bottom line plus one. Has some sort of cost benefit analysis been conducted? This might be part of a business case. Has a risk analysis and risk mitigation process been conducted? Does the project align with broader government objectives? Is a governance model in place for this project? What is it?
The basics Who is the sponsor? Who will own the project? What is or are the deliverables? Who is delivering the project?
A successful governance committee the most important attribute that a project governance meeting must establish is free and open disclosure and reporting. A governance committee should encourage the project manager to present a true picture of the status of a project at regular meetings. To achieve this, a committee must develop an environment of trust, respect and support with the project manager.
A Governance Design Model / Learning Based Crisis / problem / Need for solution Context Inception Project Concept Selection of Board Initial Meeting of Board Stakeholders Selection Committee skill set / representation Board size / balance Set procedures Training for Board - Simulations / gaming Lessons Knowledge Management Publish / Seminars Governance Meetings * Board only * with Project Manager Final Meeting Review of Board function