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Renn (2010) was correct: 'Today's society seems to be preoccupied with the notion of risk.' In the past decade the world has seen the dramatic collapse of large organisations such as Enron® and WorldCom, and witnessed, more recently, the global financial crises, all drawing attention to the failures of effective risk management and the consequential substantial losses incurred by society. The response of legislators in the US and elsewhere was to draft laws that seek to enforce good corporate governance, including risk management.

The emphasis on risk control and compliance with law is now being extended to one that views risk management as a strategic corporate activity. Ernst & Young (2012) termed this mature risk management practice. There is a high level of integration and coordination across risk control and compliance functions, with an additional emphasis on turning the existence of risk into positive business results. Ernst & Young go so far as to conclude from their research that

Risk is now becoming the fourth dimension of business. People were the first dimension. Process became the second dimension during the height of the manufacturing era. Evolving technology formed the third dimension. Embedded risk as the fourth dimension of business has the potential to fundamentally transform how organizations connect risk to reward.' (11)

Projects and Governance

As the perceptions of, and attitudes to, risk management change, new approaches to managing projects are appearing, largely brought about by the emergence of the Project-Based Organisation (PBO). Organisational objectives are now increasingly implemented through projects. Vertical bureaucracies are flattened in favour of teams and team-based arrangements. They are better suited to responding to fast-changing markets and meeting consumer needs. 'In PBOs, a project is a major endeavour and the mechanism for creating, responding to, and executing new business opportunities' (Peltokorpi and Tsuyuki 2006: 38). These developments have caused a review of the traditional positivist view of project management, with its well-defined tools and techniques for managing individual projects, offered by sources such as the Project Management Institute (PMI) and the Project Management Body of Knowledge (PMBOK®).

Within such organisations the challenge is not only to choose the right projects and deliver projects successfully, but also to ensure that projects can be sustained. The organisation has to continue finding projects that deliver new capacities and capabilities and contribute to profits. This falls within the scope of Project Governance: the forecasting and monitoring of the impact of project performance on overall organisation performance (Abu Hassim et al. 2011).

The concept of project governance is only beginning to be explored by practitioners and researchers. It has attracted many interpretations. One is to distinguish between the performance and conformance dimensions of governance. Performance provides expectations about the achievement of corporate objectives and is associated with operational activities such as effective resource utilisation in order to maximise the benefits flowing to stakeholders. Conformance, on the other hand, focuses on meeting the expectations of external scrutiny through compliance with various laws and principles. While conformance focuses on accountability and responsibility to demonstrate due diligence under law, performance has a leadership role linked to the execution of business activities and therefore has more a business orientation.

For project governance this means following acceptable and defensible industry standards and/or best practice and implementing internal systems that guide the operation of projects to achieve satisfactory business outcomes. Within project governance can be found Project Risk Governance (PRG), an even newer concept. Project risk governance is defined in this book as deploying organisational structures, processes and relational mechanisms that not only minimise the uncertainty associated with negative project risk but also maximise the benefits of positive project risk. Kendrick (2004: 69) referred to this as 'an organization's ability to manage risk as both a value-creating opportunity as well as a value-protecting activity'.

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