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Governance in business refers to the framework that determines how decisions are made and who is accountable. Simply put, it’s about knowing who is in charge.

Corporate Governance

Every organization follows its own set of standards and practices, known as corporate governance, which guide its actions. This framework helps an organization achieve its goals and balance the needs of stakeholders, management, and customers. Corporate governance impacts all parts of an organization, including action plans, controls, and performance metrics.

To manage change effectively, it’s crucial to understand the organization’s structure and culture. Good governance in change management clarifies roles and responsibilities, helping everyone know who makes decisions and their relationships within the change process.

A practical example of governance is the use of steering committees. These committees set priorities and guide the organization’s operations, acting as advisory boards to help project managers and the company make strategic decisions.

Project Governance

As a project manager, you will oversee project governance, which is the framework for making project decisions. This ensures projects run smoothly, stay on schedule, and remain within budget. Project governance includes policies, regulations, functions, processes, procedures, and roles.

Intersection of Project and Corporate Governance

Project governance must be tailored to your organization’s specific needs. It aligns with corporate governance, focusing on project-related activities. Effective project governance ensures projects meet the organization’s larger goals, are efficient, and are sustainable. Key aspects include:

  • Balancing long- and short-term organizational interests
  • Making informed decisions on which projects to pursue based on available resources
  • Providing accurate and timely information to the board and stakeholders
  • Engaging senior managers for their input and decision-making
  • Setting clear and achievable goals during the initiation phase
  • Assigning accountability to experienced teams during the planning phase
  • Learning and adapting during the execution phase

Corporate governance, with its comprehensive oversight, supports project governance by ensuring compliance, mitigating risks, and guiding project managers. It helps secure resources, address issues, avoid decision-making delays, gain stakeholder buy-in, and raise project visibility at the executive level.

When interviewing for a new role or starting a new project, consider the organization’s culture, structure, and governance practices. Understanding these aspects helps you know how decisions are made, who is responsible, and what potential issues might arise.

Key Points

  • Corporate Governance: Standards and practices guiding an organization.
  • Project Governance: Framework for project decision-making.
  • Steering Committees: Advisory boards for strategic decisions.
  • Tailored Governance: Aligning project governance with organizational needs.
  • Effective Governance: Ensures alignment, efficiency, and sustainability.

Understanding governance in business helps you navigate decision-making processes, responsibilities, and potential challenges, ensuring successful project and organizational outcomes.