Corporate/Organizational Governance

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the PMKI
Location:  PMKI > Organizations & Governance > Corporate/Organizational Governance. 
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This subject covers the creation and implementation of the organizational objectives, policies, practices and systems that are responsible for ensuring organizational resources are utilized effectively and the work of the organization is aligned with its strategy and objectives. The concepts outlined in these papers are consistent with ISO 21505 Project, programme and portfolio management - Guidance on governance and ISO/IEC 38500:2010 Corporate governance of information technology.

Topics included in Corporate/Organizational Governance:

- The Function of Governance and Governing
- Governance and Stakeholders
- Governance systems
- Governing the organization's Projects, Programs, & Portfolios
- Governance failure
- Differentiating Governance and Management
- Useful External Web-links & Resources.

Other related sections of the PMKI:

- Corporate/Organizational Management

The Function of Governance and Governing

The structuring and oversight of the organizations governance systems and capabilities.

The purpose of governance is to 'to align as nearly as possible the interests of individuals, organizations and society', this is a much higher order of objective than merely enforcing processes and procedures.

WP: Organizational Governance. The art of good governance is having sufficient processes in place to prevent malfeasance, whilst achieving the strategic objectives of the organization.

Blg: Defining Governance. What the Words Mean. Constructing a useful definition of governance.

Blg: Understanding Governance. Discussion of various governance frameworks and their purpose.

WP: The Functions of Governance. The Six Functions of Governance that define governance and differentiate governance from management.

Blg: Governance processes and terminology. This blog provides a set of referenced definitions for the different terms and suggest a hierarchy for use by a governing body.

Art: The origins of governance. History of the development of the concept of organizational governance.



Governance and Stakeholders

The link between governance and stakeholders

Art: Governance and Stakeholders. The application of Stakeholder Theory to governance.

Art: Stakeholder engagement by any other name. The relationship between stakeholders, CSR, the TBL, sustainability, ISO 26000, GRIG4 reporting; and what this means for you.

Prs: Portfolio governance and risk – it’s all about the stakeholder. The art of portfolio management is to balance the risks and rewards of investing in projects, whilst keeping the overall risk exposure at a level that is acceptable to organization's the key stakeholders.

Art: Stakeholders expect good governance. The rise of stakeholder activism is increasingly affecting the way organizations of all types are governed and managed, but many people confuse ‘good management’ with governance. Governance is firstly focused on creating the environment in which ‘good management’ can flourish and then on ensuring the organization's management is ‘good’.

See also the PMKI page on: Stakeholder engagement and management



Governance systems

The interaction between project management systems and the organizations overall management and governance systems.

WP: Governance & Management Systems. The symbiotic relationship between governance systems and management system in the creation of value from PPP.

Blg: Governance from the perspective of Systems Theory. A view on how governance, management and project management systems interact within an organisation.

Blg: Be careful what you govern for! The governance challenge is working out a way to implement efficient systems that also encourage an appropriate degree of innovation and experimentation.



Governing the organization's Projects, Programs and Portfolios

Governance focuses on the structuring and oversight of the organization's capability to manage the delivery of its portfolio of projects and programs to create value.

The strategic management of projects, organizational capabilities and control boards are included in Corporate/Organizational Management.

PMOs and support offices have their own page.  

Corporate GovernanceProject governance is a sub-set of the overall governance processes of the organization focused on defining as accurately as possible 'what' the project has to deliver, and then ensuring resources and systems are in place to achieve a successful outcome! It goes without saying the 'what' should be aligned with and contribute to the strategic objectives of the organization. Projects are typically the catalysts that generate the new income streams, greater efficiencies and business changes, which underpin changes in overall corporate performance. These changes being the basis for the forecast future incomes, expenditures and profitability that need to be disclosed to the market on an ongoing and ‘prompt’ basis.

The legal liability of corporate managers and Directors the world over is being tightened. At the same time shareholders and other corporate stakeholders are becoming less tolerant of errors of judgement and loss of control. These changes have a common purpose; to increase the predictability of an organizations future financial performance and to keep the markets informed of changes as they occur. The challenge now facing every organization that relies on projects to instigate change and grow value is to move from an ad hoc system of ‘doing a project’ to one that is integrated, robust, repeatable and auditable. This transition requires the active involvement and understanding of senior management, supported by properly trained and qualified project personnel who have the authority and capability to implement best practice processes and systems.

The two key questions that need to be answered before initiating a project are 'can we do it?' and 'should we do it?'. If there is any doubt about the first question a feasibility study is required, WP1027 outlines the processes involved in undertaking a Feasibility Study. The question 'should we do it' is answered by the Business Case

WP: PPP Governance (Project Program Portfolio). You govern the organization that undertakes projects as a part of its business but the governance process needs to be capable of governing PPP. This aspect of governance is:

Art: Governing for Success - Helping deliver successful projects. Suggestions on the journey organizations need to undertake to evolve and mature their management processes to achieve consistent success in the delivery of their projects and programs.

Art: Improving the Governance of Projects, Programs and Portfolios. Capabilities any governing body can implement to enhance it ability to govern PPP effectively.

PP: The Management of Project Management. An overview of the systems needed to govern and manage projects, programs and portfolios.
   -  Download the academic paper published in the IJPM
   -  Download the presentation

Prs : Governing to Create Value: An organizational perspective on effective project management. Governance is more than compliance. The purpose of covering any organization is provide effective stewardship of the resources being governed to provide sustainable benefits for the relevant stakeholders.

Art: Lessons for PMO managers from the CBA scandal. The CBA financial scandal of 2018/19 was a classic example of the effect of setting the wrong performance targets. If your measurement systems focus on the wrong things, you will get exactly what you asked for!

Prs: Governing Agile – the changing role of project controls in an ‘agile’ environment. The challenges of governing and managing an 'agile' environment.

Prs: Portfolio governance and risk – it’s all about the stakeholder. The art of portfolio management is to balance the risks and rewards of investing in projects, whilst keeping the overall risk exposure at a level that is acceptable to organization's the key stakeholders.

Art: ‘Not knowing’ is no longer an option. Effective governance and management requires timely access to ACCURATE information.  Ensuring the information used to manage the organization is ACCURATE is an core governance responsibility.

DP: Conditions for project success. Research by the APM confirms that the environment in which the projects operate are at the heart of improving project outcomes.



Governance failure

The consequences of poor governance is poor management leading to loss of value.

Blg: Poor Governance creates complexity. Uncertainty is not the same as ambiguity – failing to manage both of these factors increases complexity.

Blg: The Capital Crime. Consequences of executive management failing to effectively ‘manage the management’ of projects and programs.

Blg: Project or Management Failures? Defining how many project failures are caused by project management shortcomings and how many are set up to fail by the organizations management.

Art: Why are so many projects set up to fail? Allowing management to set unrealistic targets is at its root a governance failure.

Blg: Is your steering committee costing $5000 per hour? Effective steering committees work with the project manager and sponsor to help the project successfully navigate the organizational stakeholder environment and resist the urge to interfere in the actual running of the project or program!



Differentiating Governance and Management

The key difference between management and governance: Governance sets the rules and objectives, management works within the 'rules' to achieve the objectives.

In many jurisdictions governance is a legal responsibility of the organization's Officers. Precisely who is an 'officer' has been clarified by the Australian High Court in Australian Securities and Investments Commission v King [2020] HCA 4.

People who are 'officers' of a corporation and legally responsible for its governance include: the Secretary of the Corporation and its Directors, people who make, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation, and people who have the capacity to affect significantly the corporation's financial standing. the key finding in ASIC v King is that the function of being an officer is defined by reference to the facts of the relationship between an individual and the corporation in relation to managing or directing the affairs of the corporation.

Blg: Does organizational governance exist? Yes! Governance sets the objectives and rules for the organization, management works within the rules to achieve the objectives.

Blg: Management -v- Governance. The governing body (typically Directors) directs and governs; managers manage at various levels.

Blg: Governance -v- Management: A Functional Perspective. The functional differences between the roles of governance and management. Art : Stakeholders expect good governance. Stakeholders are becoming less tolerant of governance failures leading to bad management, but confuse governance and management.

Blg: PMI’s Practice Guide for the Governance of Portfolios, Programs, and Projects. Misses the 'boat' by failing to differentiate the functions of management and governance - this post highlights the differences and the shortcomings in the Practice Guide.



Useful External Web-links & Resources


Communication Training Project, Program & Portfolio Governance. This workshop will provide senior managers and others responsible for the direction and governance of projects, programs and portfolios with the resources need to be effective in this role. (view course details).




ISO 21505:2017 Project, programme and portfolio management -- Guidance on governance Also available as AS ISO 21505 from Standards Australia.

APM GoPM Publication (UK) - Directing Change, a guide to governance of project management
- Association for Project Management - 
- Download the booklet: Directing Change - A guide to governance of project management

OECD Principles of Corporate Governance:


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