Concepts
An effective governance model is essential for ensuring that projects and programs align with organizational strategy and contribute to strategic goals. This is especially pertinent for portfolio management, as recognized in the Portfolio Management Professional (PfMP) exam. The governance model outlines clear processes for decision-making, defines roles and responsibilities, and sets up governance bodies such as steering committees and governance boards to oversee the decision-making processes.
II. Governance Model Defined
In simple terms, a governance model is a structure or framework that helps organizations make decisions effectively and transparently to meet their strategic goals. It consists of various elements, including, but not limited to, decision-making roles and responsibilities, policies, and the formation of governance bodies. It is the blueprint for how authority is executed and controlled within an organization.
III. Governance Structure
a. Steering Committees
Steering committees provide a structured way for relevant stakeholders to participate in decision-making processes. Steering committees are usually composed of senior executives and project stakeholders who provide strategic direction and advice, help prioritize projects, and ensure that projects align with organizational goals.
b. Governance Boards
Governance boards provide an additional layer of oversight and decision-making. Board members might include executive leaders, project managers, and other key stakeholders. They make decisions about high-level strategic projects, manage risks, and provide direction for project teams.
Table 1: Comparison between Steering Committees and Governance Boards
| Steering Committees | Governance Boards | |
| Roles | Provide strategic direction and advice, help prioritize projects | Make high-level decisions, manage risks, give directions to project teams |
| Composition | Senior executives, project stakeholders | Executive leaders, project managers, stakeholders |
IV. Policies, Roles, and Decision-making Processes
Clear policies, defined roles, and structured decision-making processes are crucial for effective governance. Policies outline what decisions need to be made, who can make those decisions, and what information should be considered. Decision-making roles and processes detail who has the authority to make what decisions and how those decisions should be made.
V. Responsibilities, Rights, and Authorities
Responsibilities outline what each role is accountable for, while rights refer to what actions they can take. Authorities delineate who has the power to make decisions or allocate resources. Responsibilities, rights, and authorities should be clearly communicated and understood by everyone in the organization to ensure transparency and avoid conflicts.
VI. Achieving Strategic Goals Through Effective Governance
An effective governance model supports an organization to navigate through complexity, manage risks, and ensure the alignment between projects and organizational strategy. This, in turn, helps the organization to achieve its strategic goals. For example, by defining clear roles, responsibilities and decision-making processes, an organization can ensure that project decisions are made effectively and expediently, reducing project delays and ensuring that projects deliver value to the organization.
In conclusion, the governance model is fundamental to any organization, especially when it comes to matters relating to project portfolio management. A well-defined and established governance model aids in attaining strategic goals efficiently and effectively. It plays a pivotal role in ensuring agility, adaptability, and alignment within an organization, thereby paving the way for better project outcomes and ultimate success. In the Portfolio Management Professional (PfMP) exam, knowledge and understanding of this governance model is key to attaining certification.
Answer the Questions in Comment Section
True or False: A governance model is not essential to support effective decision-making within an organization.
• True
• False
Answer: False
Explanation: A solid governance model is crucial in supporting effective decision-making. This model will define roles, responsibilities, and authorities, providing a structure and framework for making strategic decisions.
A governance board is typically responsible for:
• A. Establishing policies and procedures
• B. Ensuring alignment with strategic goals
• C. Making day-to-day operational decisions
• D. Both A and B
Answer: D. Both A and B
Explanation: A governance board’s function is typically setting policies and procedures and ensuring alignment with strategic goals. Operational decisions generally aren’t their primary responsibility.
True or False: Decision-making roles and authorities are optional in a governance model.
• True
• False
Answer: False
Explanation: Defining decision-making roles and authorities are an essential component of a governance model. They enable efficient decision-making processes and ensure everyone knows their responsibilities.
Which of the following is not a typical role within a governance model?
• A. Steering committee
• B. Governance board
• C. Operational Manager
• D. IT Manager
Answer: D. IT Manager
Explanation: While IT managers often play a part in executing strategies, they aren’t usually a primary component of the governance model.
True or False: A governance model can improve an organisation’s ability to achieve strategic goals.
• True
• False
Answer: True
Explanation: An effective governance model ensures alignment across the organization and supports the achievement of strategic goals.
The main role of a steering committee within a governance model is to:
• A. Oversee day-to-day operations
• B. Approve low level operational decisions
• C. Drive the strategic direction of the organization
• D. Monitor the performance of middle management
Answer: C. Drive the strategic direction of the organization
Explanation: A steering committee often involves senior leaders in an organization who are in charge of guiding the organization’s strategic direction.
True or False: In a governance model, the governance board and the steering committee have the same role and responsibilities.
• True
• False
Answer: False
Explanation: While both are key components of a governance model, they typically have different roles and responsibilities. The governance board often focuses on establishing policies and ensuring strategic alignment, while the steering committee drives the strategic direction.
Establishing a governance model is primarily the responsibility of:
• A. The project manager
• B. The portfolio manager
• C. The operational manager
• D. The organizational change manager
Answer: B. The portfolio manager
Explanation: While all these roles have a part to play, establishing a governance model is primarily the responsibility of the portfolio manager, who must weave together various aspects of the portfolio to align with strategic goals.
True or False: Policies defined within a governance model should ensure alignment with the organization’s strategic goals.
• True
• False
Answer: True
Explanation: Policies defined within a governance model should directly support and align with the organization’s strategic goals, helping to guide decisions and behavior.
A decision-making role within a governance model is typically responsible for:
• A. Making all strategic decisions
• B. Making all operational decisions
• C. Making decisions within their scope of authority
• D. Overseeing the performance of operational staff
Answer: C. Making decisions within their scope of authority
Explanation: In a governance model, decision-making roles are typically defined with a specific scope of authority, within which they have the mandate to make decisions. They don’t necessarily make all strategic or operational decisions.
Great post on governance models for PfMP! Can anyone share an example of an effective governance board structure?
Steering committees are crucial for effective decision-making. Anyone using agile methods in their governance model?
Thanks for the insights! This is very helpful for my studies for the PfMP exam!
Policies can make or break a governance model. What key policies do you think are essential for effective portfolio management?
Appreciate the detailed discussion. This will surely help me understand the governance aspects better!
What roles and responsibilities do you assign in your governance boards?
Thanks for this post! Clear governance structures are essential to the success of portfolio management.
We struggled initially with decision-making roles. Any best practices on assigning decision-making authority?