BE1170 Project, Programme and
Portfolio Management:
Project Governance
Robert C Moehler
School of the Built and Natural Environment
Northumbria University
Wynne Jones Building (106a)
Ellison Place
Newcastle upon Tyne NE1 8ST
+44 0 191 227 4746
robert.moehler2@northumbria.ac.uk
Readings for this Lecture
Association for Project Management (2012) APM Body of Knowledge 6th edn. Buckinghamshire: APM Publishing.
Aguilera, R. V., Williams, C. A., Conley, J. M. and Rupp, D. E. (2006) Corporate governance and social responsibility: a
comparative analysis of the UK and the US. Corporate governance, 14(3), 147 – 158.
Bekker, M. C. and Steyn, H. (2008) The impact of project governance principles on project performance, PICMET Conference
2008, July 27-31. Cape Town: PICMET.
Bittner, E. and Gregorc, W. (2010) Experiencing Project Management. Erlangen: Siemens.
Bloomquest, T. and Müller, R. (2006) Middle Managers in Program and Portfolio Management: Practice, Roles and
Responsibilities, Newton Square, PA: Project Management Institute.
BS 6079-1 (2002). Guide to Project Management. London, BSI.
Caporaso, J. A. and Wittenbrinck, J. (2006) The new modes of governance and political authority in Europe. Journal of European
public policy, 13(4), 471 – 480.
Castells, M. (1996) The rise of the network society. Oxford: Blackwell.
Child, J. and Rodrigues, S. B. (2003) Corporate governance and new organizational forms: issues of double and multiple agency.
Journal of management and governance, 7(4), 337 – 360.
Clegg, S.R., Pitsis, T.S., Rura-Polley, T. and Marosszeky, M. (2002) ‘Governmental matters: Designing an alliance culture of interorganisational collaboration for managing projects’ Organisation Studies, 23(3): 317-37.
Flyvbjerg, B. (2011) ‘Over Budget, Over Time, Over and Over Again Managing Major Projects’, in Peter W. G. Morris, Jeffrey K.
Pinto, and Jonas Söderlund (eds.) The Oxford Handbook of Project Management, Oxford: Oxford University Press.
HM Treasury (2003). The Green Book: Appraisal and Evaluation in Central Government, Treasury Guidance, London: TSO.
Helm, J. and Remington, K. (2005) ‘Effective Project Sponsorship: An Evaluation of the Role of the Executive Sponsor in Complex
Infrastructure Projects by Senior Managers’, Project Management Journal, 36(3): 51-61.
Kaufmann, D. (2005) Myths and realities of governance and corruption. In: World Economic Forum Global competitiveness report
2005-2006. New York: Oxford University Press. pp. 81 – 95.
Klakegg, O.J., Williams, T., Magnussen, O.M. and Glasspool, H. (2008) ‘Governance frameworks for public project development
and estimation’, Project Management Journal, 30/Supplement: S27-S42.
Readings for this Lecture
Miller, R. and Hobbs, B. (2005) ‘Governance regimes for large complex projects’, Project Management Journal, 36(3): 42-50.
Müller, R. (2011) ‘Project Governance’, in Peter W. G. Morris, Jeffrey K. Pinto, and Jonas Söderlund (eds.) Oxford Handbook of
Project Management, Oxford: Oxford University Press.
Mueller, R. (2009) Project Governance. Surrey: Gower Publishing.
Müller, R. and Stawicki, J. (2007) ‘A framework for building successful project based organisations’, Project Perspectives, 29(1):
68-71.
Müller, R. and Turner, J.R. (2005) ‘The impact of principle-agent relationship and contract type communication between project
owner and manager’, International Journal of Project Management, 25(5): 398-403.
Müller, R. and Turner, J.R. (2002) ‘A Model and Gap-Analysis of Buyer – Seller Communications in IT Projects’, in Proceedings of
the PM-Days Research Conference, November 27-28, 2002, Vienna, Austria.
McWilliams, A., Siegel, D. S. and Wright, P. M. (2006) Corporate social responsibility: strategic implications. Journal of
management studies, 43(1), 1 – 18.
OGC (2008) OCG governance, Office of Government Commerce, http://www.ogc.gov.uk accessed 12th March 2012
Pinto, J.K., Slevin, D.P. And English, B. (2009) ‘Trust in projects: An empirical assessment of owner/contractor relationships’,
International Journal of Project Management, 27(6): 638-648.
Pryke, S.D. (2005) ‘Towards a social network theory of project governance’, Construction Management and Economics, 23: 927-39.
Pryke, S.D. and Pearson, S. (2006) ‘Project governance: Case studies on financial incentives’, Building Research and Information,
36(6): 534-45.
Ruuska, I., Aholaa, T., Arttob, K., Locatellic, G. and Mancini, M. (2011) ‘A new governance approach for multi-firm projects:
Lessons from lkiluoto 3 and Flamanville 3 nuclear power plant projects’, International Journal of Project Management, 29:
647–660.
Shenhar, A., Dvir, D., Milosevic, D., Mulenburg, J., Patanakul, P., Reilly, R., Ryan, M., Sage, A., Sauser, B.,Srivannaboon, S.,
Stefanovic, J. and Thamhain, H. (2005) ‘Toward a NASA-specific project management framework’ Engineering Management
Journal, 17(4): 8.
Stoker, G. (1998) 'Governance as theory: five propositions', International Social Science Journal, 50 (155), pp. 17 - 28.
Shankman, N. A. (1999) Reframing the debate between agency and stakeholder theories of the firm. Journal of business ethics, 19,
319 – 334.
Warning

Controversial

No sales pitch
Objective

To understand
– What is the purpose of project governance?
– How do you actually implement it?
– What value does it bring and how do we prove
it?
Most organisations don’t do it

“I don’t care what the report says, I don’t care
you’re going to deliver late, with less
functionality. Because that’s not going to happen.
You will be on time, and it will work. Now stop
wasting your time in my office and go make it
happen.”

12 months later the project is canned after being £45m
over budget. £165m spent. Zero benefits. The
implementation partner was kicked out. The senior exec
kept their job, no questions asked.
Most organisations don’t do it

“This project is pushed for time. The deadline is
very tight. The team is a little smaller than ideal
so we’re going to have to work efficiently and
hard. But if we pull together we can deliver this.”

The project delivers 35% late (compared to baseline estimate).
Attrition rate of 25% of team members.

Most organisations don’t do it

And 101 other examples
–
–
–
–
–
–
–
–
–
–
A business case that doesn’t add up
Undefined requirements (or requirements not signed off)
Poor management around stage boundaries
Technically unfeasible projects
A large change programme in an organisation that doesn’t know how to change
Doing too many projects but start another one
No match to organisation strategic direction
Incapable delivery team
No cohesion or understanding on benefits expected
Huge risks not mitigated or understood prior to project kick off
Post report: 8 Causes of Project Failure
1. Lack of a clear link between the project and the organisation’s key
strategic priorities, including agreed measures of success.
2. Lack of clear senior management and ministerial ownership and
leadership
3. Lack of effective engagement with Stakeholders
4. Lack of skills and proven approach to project management and risk
management.
5. Lack of understanding of and contact with the supply industry at
senior levels within the organisation.
6. Evaluation of proposals driven by initial price rather than long-term
value for money (especially securing the delivery of business
benefits).
7. Too little attention to breaking development and implementation into
manageable steps.
8. Inadequate resources and skill to deliver the total delivery portfolio.
Which are Associated with Governance?
1. Lack of a clear link between the project and the organisation’s key
strategic priorities, including agreed measures of success.
2. Lack of clear senior management and ministerial ownership and
leadership
3. Lack of effective engagement with Stakeholders
4. Lack of skills and proven approach to project management and risk
management.
5. Lack of understanding of and contact with the supply industry at
senior levels within the organisation.
6. Evaluation of proposals driven by initial price rather than long-term
value for money (especially securing the delivery of business
benefits).
7. Too little attention to breaking development and implementation into
manageable steps.
8. Inadequate resources and skill to deliver the total delivery portfolio.
Those that say they do it… don’t

Warren Buffet…
Those that do do it, do it wrong

We’re going to follow a strict methodology here…
– We’re going to do it my way

I’d like your buy in on this…
– I want someone else to blame when this thing bombs

We want you to be the executive champion on this
project
– I want to be able to blame you for my mistakes

There are larger issues at stake
– I’ve made up my mind so don’t bother me with the
facts
Health Warning

Most organisations are not ready to accept
‘proper’ project governance
What is Governance?

No-one can agree
ITGovernance.co.uk –
6 areas of governance
APM – 11 facets of project governance.
TotallyOptimisedProjects – 26 areas of project governance
HM Treasury – The 7
aims of project
governance
Human Systems – 8 principles of govern
Principles of Governance of PM
APM recognised 11 principles have been identified for governance of project management.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
The board has overall responsibility for governance of project management.
The roles, responsibilities and performance criteria for the governance of project management are clearly
defined.
Disciplined governance arrangements, supported by appropriate methods and controls, are applied throughout
the project life cycle.
A coherent and supportive relationship is demonstrated between the overall business strategy and the project
portfolio.
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.
Members of delegated authorisation bodies have sufficient representation, competence, authority and
resources to enable them to make appropriate decisions.
The project business case is supported by relevant and realistic information that provides a reliable basis for
making authorisation decisions.
The board or its delegated agents decide when independent scrutiny of projects and project management
systems is required, and implement such scrutiny accordingly.
There are clearly defined criteria for reporting project status and for the escalation of risks and issues to the
levels required by the organisation.
The organisation fosters a culture of improvement and of frank internal disclosure of project information.
Project stakeholders are engaged at a level that is commensurate with their importance to the organisation
and in a manner that fosters trust.
Governance of project management
Organisation
Corporate
Governance
GoPM
Project
Management
APM (2005) Directing Change: A Guide to governance
of project management
Governance of project management
Corporate Governance Activities
Portfolio Direction
P. Sponsorship
Disclosure
reporting
Project Management
Effectiveness
Project Management Activities
APM (2006, 2012)
What is Governance?

No-one can agree
 And it doesn’t really matter!
Project Governance
“...concerned with creating the conditions for ordered
rule and collective action...” (Stoker, 1998)
“...a set of management systems, rules, protocols,
relationships and structures that provide a framework
within which decisions can be reached for project
development and implementation” (Bekker and Steyn,
2008)
“...synonymous with good and transparent management
of firms and institutions”(Müller, 2009)
Origin
“Contemporary governance is grounded in
Foucault’s (1926-1984) philosophy of Neo-liberalism, in which
individuals are not directly “steered” by
their supervisors but through subtle forces
in the society (or company, or organisation)
in which they live (or work for)... develop a
strategy for creating a domain whereby
individuals are responsible and engage in
‘self-care’”
Origin
 Project governance is not:
– Project Control as a mechanism within the
confines of Planning and Execution of the
Project (Initiate, Plan, Execute and Close) –
managing in a project;
 Instead
project governance relates to:
– External Environment it provides the context in
which the project is activated and realised – to
work on or for projects.
Objectives of Governance

Let’s instead focus on what we want governance to
achieve.
– Stop things going wrong
– Deliver the right benefits
– Avoid non-value adding projects
– Make sure the right ‘big’ decisions are made

If projects matter, project governance matters
Governing
1.
2.
3.
4.
5.
Governance is about rules – self
imposed – Government imposed –
Peer/Profession imposed
Formal – Informal
Behaviour
Ethics
Rules of engagement
The roles in Governance

Long term view
 Be negative not positive
 Work out which 30% of what you’re doing
is wrong
•
•
•
•
Where does governance come from?
Rooted in Aims/Mission of business and
the business plan?
Corporate governance
Direction, Administration & Control of
Companies
The Processes, customs, policies & laws
affecting these
Who sits in the Governance board?

Keep it small
 Keep it senior
 NO(!) project stakeholders
Implementation
What then are the key groups involved?:
•
Board of Directors: Strategic value of projects
 (Policy formation – Who to be involved – Resources);
•
Project Sponsor: Crucial role [Helm and Remington, 2005; Müller
and Turner, 2002] (Senior in organisation – Networking abilities –
Confident – Charisma – Objective);
•
Steering group: Principle institution (Authority – Linkage role –
Governance infrastructure/framework)
•
Stakeholders: ‘...all those who have a stake in the
[project];...something to gain or lose through actions of [the
project]’ (Müller, 2009). Narrow staff/suppliers Wider
communities/industry.
Implementation

What questions should you ask and what answers should you
expect that indicates all is well?
– Remember your objectives!
– Is this project benefit still worthwhile to achieve?
– Are we going to achieve it?
– Do we have confidence? If not, what are we going to do about it?
– How does this project compare to our lessons learnt?
– What’s the plan B?
– What are we doing about the key risks?
Implementation

Honesty
– Publish the decisions made and reasons why
– Open these up to scrutiny
– Publish the data that informed the decisions
GENERIC PROJECT GOVERNANCE MODELS
Authors
Bloomquest & Müller (2006)
Levels of analysis
TCE, Gov. of multi-project organisations
Müller (2009)
TCE, Agency theory, Organisational gov. paradigms
Pinto et al. (2009)
Role of trust in projects & their governance (gov.)
PROJECT SPECIFIC GOVERNANCE MODELS
Authors
Winch (1989, 2001)
Clegg et. al. (2002)
Project type
Construction
Levels of analysis
Pryke (2005)
Pryke & Pearson (2006)
Construction
TCE, Relationships & incentives
using SNA
Miller & Hobbs (2005)
Lrge. Capital
Criteria for set up governance regime
Klakegg et al. (2008)
Lrge. Public
Governance approach.
Ruuska et al. (2011)
Energy con.
Shenhar et al. (2005)
NASA
Governance self-regulation, Increased
external engagement
Cat. & risk profile for selection of contracts
Turner & Müller (2004)
& Turner (2005)
IT
TCE
TCE, Governmentality
Agency theory, Collaboration & struc. in Müller
project governance
30 of 14
Implementation of governance
Step
1
2
What can be done
Education
Methodology use
and basic training
Certification
What should be
done
Management
Demand (external)
What is done
Economic pressure
3
Advanced training
and Internal
Certification
Steering
Committees
Project
Management
Office (PMO/
PSO/ PO)
Benchmarking
Audits / reviews
Mentor programs
Maturity Model
Müller and Stawicki (2007: 70)
Summary

Define objectives of governance
 Set 1 or 2 things to focus on
 Define the governance team
– Keep it small
– Keep it senior

Have a list of questions
 Publish the decisions and the data to support them
 Measure the value delivered
Questions and Answers
Thank you very much, indeed!
Robert Moehler
School of the Built and Natural Environment,
Wynne Jones Centre room 106a
Northumbria University,
Newcastle upon Tyne
Email: robert.moehler@northumbria.ac.uk
Governance


Governance has become an important topic of conversation in recent years because of
what we have previously discussed. But what is it? Have a look at Peter Eigen's TED
Talk and think about the why and how!
(http://www.ted.com/talks/peter_eigen_how_to_expose_the_corrupt.html )
Culture: "nobody has time for an entire generation any more“ We live in a fast-paced
environment; the modern human is impatient. This fact also changed his expectations towards
culture. Peter Sloterdijk lets us know why we pack culture into projects that are the essence of
landscape, regional and city planning. Return on investment - fast results. Greed is no longer
the determining factor within the banking and finance system only, says Peter Sloterdijk when
asked by 2010LAB.tv. Even in cultural politics, the return has become the determining factor.
"The essence of cultural politics is impatience", explains the cultural scientist. The
ramifications shall become visible as fast as possible - the economy as role model: "capitalism
is nothing but the acceleration process for cultural projects", reports Sloterdijk. Is it just the
impatience of politics or maybe even our own that promotes such mentality? Do we want to
wait 25 years until the next generation change takes place or rather 3 months? At last, Peter
Sloterdijk named the inhibition the highest utopia of democracy. "What happens if the
"inhibitors" and the "accelerators" meet? Our society is experiencing change - we are in the
middle of it and we have a say in where the journey shall take us.
(http://www.labkultur.tv/en/video/peter-sloterdijk-nobody-has-time-entire-generationany-more)
Homework:
Please watch:
http://www.ted.com/index.php/talks/clay_shirky_on_institution
s_versus_collaboration.html
Clay Shirky shows how closed groups and companies will give
way to networks where small contributors have big roles and
fluid cooperation replaces rigid planning.
Consider: Is Shirky’s hypothesis applicable to the organisation of
projects?
New technologies enabling loose collaboration — and taking advantage of “spare” brainpower — will
change the way society works.