Organizational Governance Systems

organizational governance systems - Organizational Governance Systems

Governance

Governance is an enabler. It typically focuses on,

  • Who makes the decisions i.e. decision rights and authority structures
  • How decisions are made i.e. the processes or procedures that are followed
  • And collaboration enablers i.e. trust, flexibility and behavioral controls

Governance can operate at different levels like governance of,

  • Organizations
  • Portfolio, program and project management
  • Portfolios, programs and projects

Defining governance also means defining the accountability of decision makers.

Organizational Governance

Organizational Governance is defined as a structured way to provide control, direction and coordination through people, policies and processes to meet organizational strategic and operational goals. It is typically conducted by a board of directors to ensure accountability, fairness and transparency to its stakeholders and includes legal, regulatory, compliance, cultural, ethical, environmental, risk, social responsibility and community functions. Organizational governance principles, decisions and processes have an impact on the governance of portfolios, programs and projects.

As an example, in the United States, the Sarbanes-Oxley Act of 2002 requires management to certify accuracy of organizational financial reporting. This has a direct impact on the rigor and frequency of reviews of the financial controls as well as financial reporting of portfolios, programs and projects. Different countries can have different laws and regulations that organizations need to adhere to.

Organizational Governance Systems

Governance systems provide a framework with functions and processes that guide activities. It can include elements of control, oversight, decision making capabilities, value assessment etc.

Remember the value delivery system?

image - Organizational Governance Systems

Governance system works alongside the Value Delivery System to enable smooth workflows, manage issues and support decision making. Governance systems provide an integrated structure for evaluating changes, issues and risks associated with the environment and any component in the value delivery system. This includes portfolio objectives, program benefits and deliverables produced by projects.

Project governance,

  • Includes defining the authority to approve changes and make other business decisions related to the project
  • Is aligned with program/organizational governance

Conclusion

Organizational Governance Systems define the way organizations work and can be a differentiator between how organizations operate and their innate culture. Organizational Governance System overarches project governance hence the way you deliver a project is heavily dependent on the organizational governance system. This is also why you cannot walk into an organization that uses Agile and start delivering a project using Waterfall or vice versa.

Check more articles on The Standard for Project Management

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