Effective Corporate Governance: Delivering value to sponsors and benefits to stakeholders.

The project flow of value concept emphasizes that successful projects deliver not just outputs, but ultimately contribute to achieving desired outcomes and benefits.

The outputs are the products of the project, delivered by the project team leaded by the project manager. The outcomes result from the use of the products by the business manager, usually named as the project owner. The benefits are what has justified the sponsor to implement the project and to create and authorize both project management and ownership structures.

Implementing an effective governance across projects, programs, and portfolios is crucial to align the parties involved and to ensure this flow of value is optimized. Herein we propose the priorities a corporate governance must address at each level.

=> Project Governance:

Clear Business Justification: A well-defined business case must be approved and managed by the sponsor party. It establishes the project's alignment with strategic objectives and its potential to deliver benefits. It creates the baseline (for the outputs, outcomes, and benefits) that, at any change, should be reviewed and updated throughout the project lifecycle, assuring the project is still aligned with the business case. The process of managing the business case is know as the management of the realization of the project benefits (or benefit realization management - BRM); it is usually performed by the business manager (the project owner) on behalf of the sponsor party.

Strong Project Management: The project manager ensures project deliverables are met within budget, on schedule, and accordingly to quality specifications. The governance in place must make clear what are the limits (or range) of deviations that must be communicated in both situations: (i) to the business manager (the project owner), and (ii) to the project sponsor. An effective project governance must include clear processes in communication and risk management.

Stakeholder Engagement: Engaging key stakeholders throughout the project fosters buy-in, helps manage expectations, and ensures project outputs, outcomes, and benefits align with stakeholder needs.

=> Program Governance:

Strategic Alignment: Programs group related projects that contribute to a broader strategic initiative and inherent goal. Program governance ensures these projects are aligned, avoid duplication of effort, and collectively deliver the desired program outcome, which derives from the delivery of the outputs of the related projects.

Benefits Management: A dedicated focus on benefits management tracks progress towards the program's intended outcomes and ensures project outputs contribute to realizing those benefits.

Performance Measurement: Well-defined metrics and regular performance reviews allow program governance to identify and address issues that may hinder project success and ultimately, benefit realization.

=> Portfolio Governance:

Strategic Prioritization: Portfolio governance selects and prioritizes projects and programs based on their alignment with overall organizational strategy and their potential to deliver the most significant benefits for the sponsor organization.

Resource Optimization: Prioritizing and allocating resources effectively across projects and programs ensures optimal utilization and maximizes return on investment for the entire portfolio.

Risk Management: Portfolio governance takes a holistic view of risks across projects and programs, identifying and mitigating enterprise-level risks that could impact the overall portfolio's ability to deliver the benefits envisioned by the sponsor organization.

=> Scaling up the flow of value: from project to portfolio

The portfolio flow of value assumes that, by implementing effective governance at each level, organizations can ensure project outputs are aligned with program outcomes and contribute to achieving the desired portfolio benefits. This translates to maximizing value delivery and ensuring projects are not just delivering deliverables, but contributing to the bigger picture of organizational success.

=> Additional Considerations:

Governance Structure: Tailoring the level of governance to the complexity and risk profile of projects, programs, and portfolios ensures the right level of oversight is applied.

Communication & Reporting: Clear communication channels and regular reporting across all levels keep stakeholders informed and facilitate course correction when needed.

Lessons Learned: Capturing and disseminating lessons learned from past projects and programs improves future decision-making and helps refining governance practices and improving the probabilities of repeating success and avoiding failures.

=> Final remarks

This is a summary of what should be a comprehensive approach for a corporate governance to integrate project, program, and portfolio governance. Different organizations have different approaches to harness the power of the project flow of value concept and unlock the full potential of their project, program, and portfolio investments. Herein follows what we think are the basis for an effective corporate governance. Hope this contribution helps to develop project, program, and portfolio management toward high level of maturity. An effective operational governance has also to be in pace to rule the business managers in realizing the outcomes from the project outputs; after all, who will put “money” inside the organization? What do you think?