Corporate Governance

(Vasudha Chhotray and Stoker, 2010) define corporate governance as, “Governance is about the rules of collective decision-making in settings where there is a plurality of actors or organizations and where no formal control system can dictate the terms of the relationship between these actors and organizations”[1]. The Australian Stock Exchange[2] publishes a list of principles for corporate governance which can also be applied to 3P (project, program, and portfolio) governance.

  1. Lay solid foundation for management and oversight
  2. Structure the board to add value
  3. Act ethically and responsibly
  4. Safeguard integrity in corporate reporting
  5. Make timely and balanced disclosure
  6. Respect the rights of security holders
  7. Recognize and manage risk
  8. Remunerate fairly and responsibly

These 8 principles published by ASX are extrapolated to be applied to 3P which will drive the processes, procedure and behavior within an organization[3].

  1. Ensure all project roles and their accountabilities are clearly defined
  2. Ensure all key stakeholders have a ‘voice at the table’
  3. Ensure decision making is informed, timely and effective
  4. All governance report should be concise, accurate and easily understood
  5. Act appropriately to ensure the project stays on track
  6. Optimize the outcome for the project
  7. Recognize and manage risk
  8. Encourage and oversee enhanced performance

The transposition of the principles from a 3P perspective is self-explanatory. But again, the implementation of these principles is dependent on the executive leadership and the procedural maturity of the organization. Leadership behavior has a definite impact on corporate culture. 3P governance does have a direct impact on the organization strategy and in turn on the product portfolio. As Cleland right says, “a project’s success or failure is the result of the leadership of the project’s stakeholders”[4].

What is your view?

[1] – Vasudha Chhotray and Stoker, G. (2010). Governance theory and practice : a cross-disciplinary approach. Basingstoke: Palgrave Macmillan.
[2] – https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-fourth-edn.pdf
[3] – Knapp, M. (2019). ENTERPRISE PORTFOLIO GOVERNANCE : how organisations optimise value from their project portfolios. S.L.: Springer Verlag, Singapor.
[4] – Cleland, D.I. (1995). Leadership and the project-management body of knowledge. International Journal of Project Management, 13(2), pp.83–88.

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