What is Project Governance? Structure, Examples, Tips

Updated Aug 3, 2022.
project-governance

Effective and timely decision-making is one of the pillars of a successful project. Decisions form an essential part of the day-to-day running of any project. Every success and failure in an organization is traceable to a decision that someone made or failed to make.  

To ensure that your projects are running smoothly and heading towards success, you need to implement effective project governance. 

In this article, you will learn everything you need to know about project governance including why it is crucial to the success of your project.

Let’s get started.

What is Project Governance? 

Project governance is the project management framework that overlooks how an organization makes project decisions. According to A Guide to the Project Management Body of Knowledge (PMBOK Guide), project governance is an “oversight function that is aligned with the organization’s governance model and encompasses the project life cycle.”

In simpler terms, project governance acts as a guide to the decision-making process. It provides a detailed method of controlling the project while ensuring the project’s success. 

Project governance helps an organization have a structured approach in conducting its day-to-day activities. The role of project governance is to help a project exist within the framework of the organization's overall structure while ensuring it applies to the entire time the project is running through carefully taken steps and protocols. 

Effective project governance helps keep essential projects running smoothly within the specific time frame within the constraint of a budget. It ensures client satisfaction which is the main goal of every successful project embarked on.

Two essential components of project governance
Source: ADEACA

3 Pillars of Project Governance

Every successful project governance strategy rests on a stable foundation. There are essential pillars that hold this foundation. The decision-making process of any organization depends on these three pillars of project governance. 

  • Information: For an effective project governance model, open communication is critical. Regular reporting is important to ensure project success. Every project is likely to fail if there is no consistent information sharing. Information acts as a guide to decision-makers.
  • People: Successful project governance involves having the right people in the right places. The people make up the most critical aspect as they are the decision-makers. Investing in getting the right people is essential. Also, assign roles and make them as clear and achievable as possible.
  • Structure: The structure of any project is the supportive leg that holds the project. This does not entail the project team alone but includes the company as a whole. The structure is divided into various committees that work specifically in their assigned area of specialization to ensure the successful completion of the project.

Roles in a Project Governance Framework

Roles serve as guidelines for each member of a project team. You need to define different roles within a project governance system. They all work hand in hand to ensure effective management and overlook the day-to-day running of each project. 

Project governance framework
Source: ResearchGate
  • Project Sponsors: At the project initiation stage of every project, you need the project sponsor to help kickstart the project. The project sponsor is an individual or a team of individuals tasked with the responsibility of the project's success. He or she often sits on the board as the chair of the project.
  • Project Manager: The project manager is the second in command concerning management and reports directly to the project sponsor. He or she is responsible for the daily tasks, duties, and management carried out on the project. The project manager gets clarity from the project sponsor about business proposals, strategies, and issues when they arise.
  • Project Stakeholders: These are the group of people who are directly at the receiving end of the project deliverables. Project stakeholders are not part of the everyday running of the project. They are at the receiving end of the outcome of the project.

Core Project Governance Principles 

Project governance systems depend on essential principles which are important to the effective running of the project. There are four core project governance principles.

1. Accountability

One of the most vital factors for project success is accountability. Lack of accountability leads to no clear leadership of the program structure. There has to be at least one person at the center leading the charge to proper solutions to various issues as they arrive. 

Accountability also helps to fasten the decision-making process as it is easier to make decisions with a sense of direction and insight. It is an important principle in effective project governance. The choice of who is to account for what and who to be accountable to is pivotal to the success of the project. 

2. Independence of Project Ownership

This involves promoting the allocation of the role of the project owner to the asset owner to provide certainty that the project will meet the project sponsor's fundamental needs of a successful project. 

There is a need for exceptional skill sets for project ownership in order not to place the project decision-making process at risk. Also, there is always the danger of operational needs prevailing which ends up placing the project at risk of negligence. 

Allocating project ownership to a professional that is not a member of the project team is the best practice for ensuring a project meets customers' and stakeholders' needs simultaneously.

3. Separation of Stakeholder’s Management from Decision-making Process

Large committees fail to make timely decisions and often end up making wrong decisions. You can attribute this to the numbers at play. The decision-making process is often congested as everyone wants to make an input and the time frame is just not enough. 

Also, all stakeholders present will not have the same level of understanding of the issues being deliberated on. Therefore, the scarce resource in time is further wasted trying to find an amicable understanding that works for everyone. 

Distinguishing the roles of the project decision-making process from the project management is vital to the success of the project. Members of the decision-making process need to be reduced to the barest minimum to give room for efficient decision-making that would be pivotal to the success of the project. 

While deciding on the right stakeholder management system to use, the needs of all project stakeholders should be put into consideration.

4. Separation of Project Governance from Organizational Governance Structures 

In a situation where you observe that an organization lacks the necessary structure in place to see a project through to completion, there is a need to establish a project governance system. Adaptability and timely decision-making are key to a project’s success. Unfortunately, many organizations’ structures do not have the framework in place to achieve this. 

Project governance structures overcome this by isolating a separate class of key decision-makers out of the organization structure. These key decision-makers drawn out of the organization’s structure are responsible for making decisions without the regularities of the hierarchies.

While deciding on the right project governance framework to implement, note that it needs to be independent of the organization's already put in place structure. Also, it has to be independent of any pending issues to avoid occurrences where the decisions of any of the project committees need approval by a board outside of that project decision-making forum. 

The steering committee or project board is in charge of project approval, progress reviews, and delivering the project outcomes and benefits. You need to carry along the steering committee or project board in the decision-making processes. 

Power to make decisions without needing to ratify them from someone else should be granted to this committee. This principle will help reduce too many hiccups in the decision-making and ensure you do it promptly.

Why Is Project Governance Critical to the Success of a Project?

Project governance often involves the need for a large chunk of investment to be sacrificed when embarking on a new project. There is always a big issue arising on what to expect upon investing in a new project governance system.

1. Ensures Accountability

Accountability is one of the backbones of a good project governance framework. The primary aim of accountability is to deliver on the project's laid down and well-detailed objectives.

2. Improves Decision-Making

Project governance helps in improving decision-making by clearly defining roles and assigning tasks to various individuals involved in the project framework. This is important as everyone knows clearly what their impact is on the project.

Also, if a risk is encountered, only the persons involved are directly affected and not the entire project. The persons affected now face the responsibility of finding quick and effective solutions to the impending issue at hand.

3. Issue Management

The project governance framework provides carefully detailed guidelines on who is affected by an issue and the way forward in countering the issue as it arises.  

4. Gathering and Dispersing of Information

Project governance helps in the gathering and dispersing of information to all members of the project team by ensuring the existence of a detailed communication plan.

Project Governance Components

Project governance components are essentially the core parts that make up a good project. This entails all the factors that you need to take into consideration to have a successful project outcome. There are eight project governance components you need to know. 

1. Governance Models

While deciding on an adequate governance model, the project manager needs to define the project framework and timeline. The absence of project governance causes apathy in the decision process. 

An overzealous governance model can also breed frustration among stakeholders, especially if you set lofty goals. The project manager needs to pick the best governance model while putting the interest of the stakeholders as well as the sponsor at heart.

2. Accountability and Responsibilities

Defining who and to whom is accountable and the responsibility each stakeholder has to perform is a project manager’s task. Holding the wrong people accountable and conferring responsibilities on the wrong people directly affect the project's success. 

Although defining who is accountable at all phases of the project management life cycle is a daunting task, it is important in the successful running of the project. 

3. Stakeholder Engagement 

Identifying all stakeholders involved in the project is one of the first steps you need to undertake.  The importance of one stakeholder should not be undermined. Carry all stakeholders along as the project progresses.

Proper identification of all the stakeholders is critical. Assigning the duties each stakeholder involved in a project has to perform is the work of the project manager. Correct understanding of a project and all its components forms the groundwork for a good framework of a good governance plan. 

4. Stakeholder Communication

Upon identifying all the necessary and important members of a project, their interests and what you expect of them needs to be explained in detail. A good communication plan ensures efficient and accurate dissemination of information to all stakeholders involved in the project.

5. Meeting and Reporting

The project manager ensures there is a perfect working balance between meeting and reporting while defining the communication plan. It is important to define the communication plan for every member of the project to ensure there is an understanding of the communication plan. Communication has to be as short and straight to the point as possible.

6. Risk and Issue Management

Projects are usually associated with uncertain and unpredictable risks and issues. Lack of preparation puts the project at risk, and although these risks are tough to predict, they should be factored into the project process. Lack of preparation puts you at risk of falling behind the project’s schedule.

The project team needs to be conscious at the start of the project on how to identify and prioritize the risks as they pop up. How they react to risks is more important than the risk itself. 

7. Assurance

Project assurance ensures that you successfully manage and deal with risks and issues effectively for the sole aim of ensuring the project’s success. A major component of a project is providing means of ensuring visibility into the project performance.

8. Project Management Control Process

Project management control process is the most difficult project governance component to execute. This is not carried out on a single-time assessment. The project manager measures the performance regularly and if need be, he or she takes actions on any deviations. 

How Project Management Software Helps With Project Governance

Project management software such as Monday.com, ClickUp, Wrike, Teamwork, and Smartsheet help with project governance thanks to its wealth of rich features. 

1. Application of Project Governance Strategies 

Project management software allows separate individuals to build custom workflow apps and track each process involved in the project including their daily tasks. These software tools equip you with the wherewithal to apply various project governance strategies to ensure successful project completion. 

2. Decision-Making

You also enjoy flexibility when setting up the decision-making process or making the decision itself. Project management software tools help you select the efficient and most efficient procedure for carrying out project governance to get the desired result.

3. Team Management and External Collaboration

Project governance is the backbone of any effective project management tool. Project governance is essential to limit the team's micromanagement and empower employees. This also provides you with ample opportunity to invite external partners to contribute to the project.

4. Simplifies Project Governance’s Processes

Applying project management software to help with carrying out the technicalities that are associated with project governance is a welcome development in the quest to help simplify the project governance process. With the aid of the project management software, project governance processes are now easier to implement. The software allows for flexibility in choosing the best project governance strategy for the specific project at hand.

Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.