Linking Project Risk Governance Structures and Processes

The PMO is a suitable vehicle to link PRG structures with processes. This is based on two premises. The PMO is perceived as a network (Aubry et al. 2007) made up of board representatives, members of the steering committee, the project sponsor and project manager. These represent different responsibilities in PRG, as outlined in earlier sections, all of which are important to the success of PRG. Although members of the PMO operate in a non-hierarchical way, they work together to implement the processes of PRG.

Second, the PMO is subject to the application of actor network theory in that it is regarded as 'a translation center' (Aubry et al. 2007:334). It processes information from diverse projects, disseminates the information about deliverables, and facilitates debate among its members. Information about the progress of PRG is obtained from each stage in the life cycle of the project and distributed to members of the PMO. They reflect on the information received, have discussions and agree to respond to circumstances that require their attention.

The PMO is therefore ideally placed to encompass multiple perspectives on PRG depending on the objectives of actors constituting the network. For PRG, the objective is to implement project risk strategies of value- protecting and value-creating through the process of portfolio, programme and project management, investment management, value realisation and performance management. Figure 5.3 illustrates the integration of PRG structures and processes.

An alternative approach to integration is to align the responsibilities of the PMO with PRG processes for each stage in the project's life cycle. To begin, processes are applied to integrate business and project strategy and to identify projects for inclusion in the project portfolio. Members of the board and steering committee participate and approve the overall risk profile of the portfolio, taking into account the organisation's risk tolerance and appetite. When project planning commences, programme and project management processes are initiated in which project risk is detailed during the construction of the business case. Strategies are formulated for value-protecting and value- creation. These processes are managed by the steering committee, the project sponsor and project manager.

Linking project risk governance structures with processes

Figure 5.3 Linking project risk governance structures with processes

During project development the focus is on project management, value realisation and performance management. Detailed project risk management processes, commencing with drawing up the project risk management plan, are carried out. The main 'actor' is the project manager, with the steering committee and project sponsor exercising an overseeing role. At project closure, reviews take place to determine the business outcomes of the project investment, PRG success/failure and lessons learned that can be carried forward to future projects.

There are a number of ongoing activities that go across PRG structures and processes. They include ongoing reviews of strategies as they are implemented. PRG performance is tracked and monitored, and corrective actions are taken if necessary. The PMO continues to be the central body and adds to the excellence in PRG. Table 5.1 summarises the integration of PRG structures and processes during the project's life cycle.

Table 5.1 Project risk governance processes and structures in the project life cycle





Project Planning

Project Delivery

Project Closure


Business/Project Interaction; Project Portfolio Management.



and Project





Management; Value Realisation; Performance Management.






Board of

Directors; Steering Committees.

Project Sponsors; Steering Committees; Project Managers.

Project Sponsors; Steering Committees; Project Managers.

Project Sponsors; Steering Committees; Project Managers.


Determine project risk tolerance and appetite; Identify strategic project risks; Approve overall project risk profile.

Determine project risks; Develop value-creating and value-protecting risk strategies.

Produce project risk management plan; Manage project risks through project development life cycle.

Review project investment;

Review project risk outcomes; Update 'Lessons Learned' repository; Determine PRG success/failure.

Ongoing Activities

• Business and project risk strategies are reviewed and revised.

• Risk performance in portfolio, programme and project management are monitored and managed.

• Impact of risks: project costs and benefits are measured against estimates in business cases.

• PMO provides the actor network structure for project sponsors, steering committees, project managers and other stakeholders.

• PMO provides guidance on project risk management standards and best practice.

• PRG maturity is assessed against maturity model.

Aubry et al. (2007) pointed out that the PMO is essentially a fluid concept since its roles and functions remain flexible to ensure the smooth transmission of information and knowledge during the accomplishment of project goals. The manner in which processes are completed can be subjective, Tooted in the values and preferences of stakeholders' (p. 334), and are determined by a number of factors. Among them are positions which provide or do not provide formal status, situation and authority. In addition, there are influences from the existence of knowledge and competencies, the way in which activities are accomplished, the rationality of goals (for example, integrating economic value to measure profit, project management efficiency and return on investment), an open system that measures growth and benefits, and human resource development, cohesion and morale that are almost invisible in performance evaluation.


This chapter identified the governance structures and relationships required to carry out the PRG processes outlined in the previous chapter. Structures operate within the broad influences of organisational leadership. The latter provides the overall capacity to design and implement PRG. Detailed responsibilities for PRG are allocated to the board, project sponsors, steering committees, project managers and the Project Management Office. While each has a specific role, they interact with each other to provide an organisational approach to PRG. The chapter concluded with a conceptual framework that links PRG processes and structures, either in a network of actors or through the project life cycle.

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