Establish project governance structure

A project governance structure typically includes roles and responsibilities, decision-making processes, risk and issue management, financial management, communication protocols, and project control mechanisms. This structure may differ slightly based on the organization and the specific type of project, but the overarching principles remain the same.

2. Understanding Roles and Responsibilities

An initial step in establishing a project governance structure is defining roles and responsibilities, often captured in a RACI matrix (Responsible, Accountable, Consulted, Informed). This matrix clarifies roles within the project, thus avoiding confusion or vagueness, and ensuring clear communication.

Here’s an example:

3. Decision-Making Processes

Another aspect of project governance is decision-making processes. For PMP exam purposes, you need to be familiar with various decision-making techniques. These might include unanimity, majority, plurality, or dictatorship. The final decision about which decision-making process to use would rest on the nature of the project, as well as the organizational structure.

4. Risk and Issue Management

Project governance also guides risk and issue management. It outlines processes for identifying, assessing, responding to, and controlling project risks and issues.

5. Financial Management

Project governance helps to control the finance of a project by setting the financial management framework. The structure addresses questions such as acceptable deviation from the budget, who can approve expense overruns, and how financial risks are managed.

6. Communication Protocols

Effective communication between all project stakeholders is vital for project success. The project governance structure typically defines the communication plan, which outlines what needs to be communicated, to whom, how, when, and by whom.

7. Project Control Mechanisms

Finally, project control mechanisms serve to track and review project progress, ensuring that the project remains on track to meet its objectives. They typically include regular project review meetings, performance tracking, change management processes, and post-project evaluations.

Establishing a project governance structure is foundational to efficient project management and is an element on which much of the PMP exam rests. As you prepare for your PMP exam or embark on a project management career, a strong understanding and application of project governance structures will be instrumental in your success.

Practice Test

True or False: Establishing a project governance structure is crucial to ensure the efficient and effective achievement of project objectives.

• True
• False

Answer: True.

Explanation: A project governance structure defines the roles, responsibilities, communication and escalation protocols. It is a critical component in guiding project execution and configuration management.

Which of the following is NOT a role of a project governance structure?

• a) Define roles and responsibilities
• b) Provide communication and escalation protocols
• c) Control the project budget
• d) Define the market strategy of the organization

Answer: d) Define the market strategy of the organization

Explanation: While project governance structures may help guide the project through alignment with organizational strategy, defining the market strategy of the organization is not within its purview.

In a project governance structure, the Project Management Office (PMO):

• a) Represents the voice of the project sponsor
• b) Manages project risk
• c) Implements corporate strategy
• d) All of the above

Answer: d) All of the above

Explanation: A PMO plays several roles, including representing the project sponsor, managing project risk and ensuring that the project aligns with, and helps to implement, corporate strategy.

True or False: Project governance structure is typically established during the project execution phase.

• True
• False

Answer: False.

Explanation: A project governance structure is typically established early in the project planning phase to guide decision-making.

A good project governance structure should facilitate decision-making, provide a framework for accountability, and:

• a) Ensure timely delivery of project tasks
• b) Facilitate communication
• c) Ensure project alignment with organization strategy
• d) Ensure that team members are trained on project management tools

Answer: c) Ensure project alignment with organization strategy

Explanation: Ensuring that projects align with organization strategy is a key role of a project governance structure. It ensures that projects support strategic goals, contributing to their relevance and success.

The project governance structure should be reviewed and updated:

• a) At the end of the project
• b) During initialization of the project
• c) When a new project manager is assigned
• d) Whenever organizational, environmental, or project changes occur

Answer: d) Whenever organizational, environmental, or project changes occur

Explanation: The project governance structure must remain relevant and effective, and should therefore be reviewed and adjusted as needed when changes occur.

Stakeholders play an important role in the project governance process.

• a) True
• b) False

Answer: a) True

Explanation: Stakeholders are a crucial part of the project governance process. They can influence, both positively and negatively, the decisions and outcomes of a project.

The project sponsor is typically responsible for:

• a) Making final project decisions when agreement cannot be reached
• b) Managing the day-to-day operations of the project
• c) Both A and B
• d) None of the above

Answer: a) Making final project decisions when agreement cannot be reached.

Explanation: The project sponsor does not manage day-to-day operations, that is the project manager’s role. The sponsor provides guidance, but primarily they are the final decision-maker when the team can’t come to an agreement.

An effective project governance structure can reduce project risk.

• a) True
• b) False

Answer: a) True

Explanation: By defining clear roles and responsibilities, communication channels, and decision-making processes, an effective project governance structure can help identify and manage project risks.

What role does the project governance play in regards to project risks and issues?

• a) It introduces risks and issues
• b) It provides a framework for identifying, assessing, and managing risks and issues
• c) It ignores risks and issues
• d) It eliminates all risks and issues

Answer: b) It provides a framework for identifying, assessing, and managing risks and issues

Explanation: An important aspect of project governance is providing a framework for risk and issue management, which includes processes for identifying, assessing, and managing project risks and issues.

Interview Questions

What is the purpose of establishing a project governance structure?

The purpose of establishing a project governance structure is to define clear roles, responsibilities and decision-making authority within a project. This structure ensures accountability, effective communication and ensures that the project aligns with the strategic direction of the organization.

Why is project governance important for a project manager in a PMP context?

Project governance provides a structured process for decision making within the project. It defines roles and responsibilities, promotes quality control, reduces risk, and facilitates effective communication. Therefore, it is an important aspect of project management under the PMP framework.

Can you describe the key components of a project governance structure?

The key components of a project governance structure include the project sponsor, the project board or steering committee, the project manager, and project team members. Additional roles may include a project management office (PMO), risk management team, and stakeholders.

What is the role of the Project Steering Committee within the project governance structure?

The Project Steering Committee is responsible for high-level oversight of the project, providing strategic direction, ensuring alignment with organizational objectives, and making critical decisions.

What role does a Project Sponsor play in project governance structure?

The Project Sponsor is typically a senior executive who champions the project within the organization. They ensure that necessary resources are allocated, remove any organizational roadblocks, and are accountable for the success of the project.

How does the project management office (PMO) fit into the project governance structure?

The PMO plays a critical role in project governance by standardizing project management practices, processes and methodologies. The PMO ensures projects align with organizational goals and strategy, and often provides resources, training and support for project teams.

What is the role of a project manager within the project governance structure?

A project manager is responsible for day-to-day management of the project including planning, executing, monitoring, controlling, and closing the project. They also manage the project team, report on project progress, manage risks, and communicate with stakeholders.

Why is communication important in a project governance structure?

Communication ensures that all parties involved in the project understand their roles, the project goals, status updates, and risks. It ensures transparency, aids in decision making, and helps to avoid misunderstandings and conflicts.

How does a project governance structure help in risk management?

A project governance structure provides a framework for identifying, assessing, and managing project risks. It ensures responsibilities for risk management are clearly defined and provides a structured process for decision-making regarding risk responses.

How can the project governance structure impact the project’s stakeholders?

The project governance structure impacts stakeholders by clearly defining roles, communication processes, and decision-making protocols. This clarity helps to manage stakeholder expectations, facilitate stakeholder engagement, and promote stakeholder satisfaction with the project outcomes.

What impact can poor governance have on a project?

Poor governance can lead to unclear roles and responsibilities, poor decision making, ineffective communication, increased risk, and a possible lack of alignment between the project and the organization’s strategic direction.

What is the relationship between project governance and project management?

Project governance provides the strategic framework and guidelines within which project management operates. While project management focuses on the day-to-day operational aspects of a project, project governance ensures that the project aligns with the overall business strategy, goals, and objectives.

What role does accountability play in a project governance structure?

Accountability within a project governance structure ensures that each role knows what they are responsible for and who they are accountable to. This helps to ensure tasks are completed, risks are managed, and the project stays aligned with its objectives.

How does a project governance structure support decision making?

A project governance structure provides a clear framework and processes for decision making. This includes defining who has decision-making authority, how decisions are made, and how they are communicated. This ensures consistent, effective decision making throughout the project.

What is the role of the project charter in the project governance structure?

The project charter is a key document in project governance. It officially authorizes the project, outlines its objectives and scope, identifies key stakeholders, and defines roles and responsibilities, including decision-making authority and processes.