Advances in Project Management Series
SERIES ARTICLE
By Robert Buttrick
United Kingdom
What is “governance”?
Some definitions and perspectives on governance
The Oxford Dictionary’s definition of governance is simply:
conduct the policy, actions, and affairs of (a state, organisation, or people) with authority.
control, influence, or regulate (a person, action, or course of events).
The OECD defines corporate governance in its Principles of Corporate Governance (2015), as:
“Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.”
The OECD, with the G20, sets out what it believes are the essential features of corporate governance a state should promote to build an environment of trust, transparency and accountability necessary for fostering long-term investment, financial stability and business integrity, thereby supporting stronger growth and more inclusive societies. The objective is that countries should enshrine the principles in their own legislative and regulatory frameworks to improve business practices and hence, performance.
The public sector faces many of the same challenges as the private sector and so adopts many of the same principles of corporate governance. In the UK public sector, for example, governance is covered in Managing Public Money (2019) and in Corporate governance in central government departments: code of good practice (2017). These concentrate mostly on roles and accountabilities but also cover risk management. The code of good practice states:
“Corporate governance is the way in which organisations are directed, controlled and led. It defines relationships and the distribution of rights and responsibilities among those who work with and in the organisation, determines the rules and procedures through which the organisation’s objectives are set, and provides the means of attaining those objectives and monitoring performance. Importantly, it defines where accountability lies throughout the organisation.”
Governance – you can’t ignore it
‘Governance’ is an important word and can make our business and public sector leaders prick up their ears. Governance is nearly always associated with two other words: ‘risk’ and ‘accountability’. Twenty years ago, governance was rarely talked about but now it is enshrined in law, regulations and codes of conduct. What happened? In the private sector, there were a number of well publicised cases of financial irregularities. Enron in the USA is the most notable, but by no means an isolated case. This event immediately, and severely, impacted Enron’s share price leading to bankruptcy; senior executives were imprisoned and Enron’s auditor, Author Anderson was found guilty of destroying documents and ceased trading world-wide. More importantly, this scandal knocked people’s confidence in business generally. The Enron scandal happened in 2001 but despite the publicity and increasing regulation, malpractice continued, led from the top, as evidenced by the profit scandal at Tesco in 2014, at Volkswagen in 2015 (falsifying car emissions), at BT Italy (alleged accounting fraud), at Carillion in 2018 (overestimating future income on large contracts), plus a rash of news reports in 2018 around malpractice and abuse in major charities.
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Editor’s note: The Advances in Project Management series includes articles by authors of program and project management books published by Routledge worldwide. Their contributions to the PMWJ are coordinated by Prof Darren Dalcher, Lancaster University Management School, UK.
How to cite this paper: Buttrick, R. (2020). Governance in a portfolio, programme and project managed context, PM World Journal, Vol. IX, Issue XI, November. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/11/pmwj99-Nov2020-Buttrick-governance-in-portfolio-programme-project-managed-context.pdf
About the Author
Robert Buttrick
United Kingdom
Robert Buttrick is an independent advisor on portfolio, programme and project management, specialising in business-driven methods, processes and standards. Recent clients include the UK’s Cabinet Office, Network Rail, and AXELOS. He is and a Visiting Teaching Fellow at the University of Warwick, a member of the British Standards Institute’s committee MS2 for project management and is a UK Principal Expert on the equivalent ISO technical committee, TC258 (dealing with international standards on portfolio, programme and project management.)
As well as being the author of “The Programme and Portfolio Workout” and the “The Project Workout”, Robert has worked in one of the world’s most turbulent and challenging industrial sectors, telecommunications, where he has been accountable for creating and running project-based frameworks for managing change, involving the direction of portfolios of over 2500 projects, totalling £4bn spend per year. Before this, Robert was with PA Consulting Group, a management and technology consultancy. There, he specialised in business-led project management, advising clients such as TSB Bank, National Rivers Authority, Property Services Agency, Avon Industrial Polymers, National Westminster Bank and RHM.
After graduating from the University of Liverpool with a first class honours degree, he joined Sir Alexander Gibb & Partners (now Jacobs) who provided consulting, design and management services for infrastructure, working in countries as diverse as Kenya, Mauritius, Yemen, Senegal and Sudan. He has also worked with the World Bank, in Washington DC on investment appraisals for major development projects.
Robert is a Master of Business Administration (Henley Management College), a Member of the Chartered Institute of Marketing, Chartered Engineer and a Member of the Institution of Civil Engineers. In 2010, Robert received a Distinguished Service Certificate from the BSI for services to national and international project management standards, and in 2013 he was made an Honorary Fellow of the Association for Project Management.
