This is the second of a series of three articles written by Taka Sande and Carel Van Zyl, both Project Management Professionals at the South Africa Chapter. In this article they speak about the PMBOK Guide, the PMI Standard for Portfolio Management and the Project Manager Competency Development Framework.
Table of Contents
Linking Project Management and Corporate Governance
PMBOK Guide Sixth Edition
PMI Standard for Portfolio Management Fourth Edition
Project Manager Competency Development Framework – Third Edition (2017)
Governance is not a new concept to the project management profession. Every project professional has to handle issues of governance on daily basis. The following PMI literature have sections that particularly give attention to Corporate, Organisational and Project Governance;
- PMBOK Guide Sixth Edition
- PMI Standard for Portfolio Management Fourth Edition
- Project Manager Competency Development Framework – Third Edition (2017)
Governance is defined as; Establishment of policies, and continuous monitoring of their proper implementation, by the members of the governing body of an organization. It includes the mechanisms required to balance the powers of the members (with the associated accountability), and their primary duty of enhancing the prosperity and viability of the organization. (from businessdictionary.com).
Corporate Governance is defined as; The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders (financiers, customers, management, employees, government, and the community).
The corporate governance framework consists of (1) explicit and implicit contracts between the company and the stakeholders for distribution of responsibilities, rights, and rewards, (2) procedures for reconciling the sometimes conflicting interests of stakeholders in accordance with their duties, privileges, and roles, and (3) procedures for proper supervision, control, and information-flows to serve as a system of checks-and-balances. (from businessdictionary.com).
In the Relationship between project governance and project performance, project governance is defined as the framework that enables the project management function to deliver the benefits of the project. Hence, corporate governance enables an organisation to deliver its strategic objectives.
Governance is required both at project or portfolio management level and at organisational level. The procedures guide the implementation of the projects and the operation of the organisation. The PMBOK give a framework for projects governance, and most countries have their own frameworks and guides for corporate governance.
Part 1; PMBOK Guide
The project manager needs to understand responsibility, accountability and authority. This forms part of corporate governance and it includes;
- Organisational Government Framework, (Part 1; PMBOK Guide Section 2.4.2, Page 43).
- Management Elements, (Part 1; PMBOK Guide Section 2.4.3, Page 44).
- Part 1; PMBOK Guide Section 3.4 gives the details of the Project Manager Competences. These competences match the skills required in corporate governance.
Through the use of the PMI Talent Triangle, the three key skill sets needed by a project manager are;
- Technical Skills,
- Leadership Skills,
- Strategic and Business Management Skills.
Besides the technical project management skills, the global marketplace now requires additional skills such as leadership and business intelligence. The project management skill set is changing with time. Subsequently, there is need for project professionals with such skills at higher management or executive levels of organisations.
Source: PMBOK Guide (6th Edition)
Part 2; Standard for Project Management
Organisational governance includes; organisational project management governance, portfolio, programme and project governance. Section 1.3, Linking Organisational Governance with Project Governance, Page 545, puts project governance in a corporate perspective.
Projects and organisations have governance. Organisational governance relates to the overall organisation and Project, Program, and Portfolio governance relates to project or portfolio level.
Targeting audience of the PMI Standard for Portfolio Management Fourth Edition is the senior executives and governance boards. These includes;
- Senior executives and governance boards who make decisions regarding organisational strategy.
- Management staff responsible for developing organisational strategy or those making recommendations to senior executives.
- Portfolio, program and project management practitioners, particularly portfolio managers.
- Strategy planners and executives in organisations.
The PMI’s Project Manager Competency Development Framework (PMCDF) – Third Edition (2017) provides a framework for the definition, assessment, and development of portfolio/ program/ project manager competency.
In 2019, Group 7 of the South Africa Chapter Director Development Programme (DDP) analysed the following competency frameworks and compared then to the PMI Project, Programme and Portfolio Manager Competences to see how they match;
- IOD South Africa Director competency framework Guide
- IOD UK Director Competency Framework Guide
- The Hong Kong Institute of Directors Core competencies
- IOD New Zealand Competency Framework
Source: PMCD Framework (3rd Edition)
These competency models were compared and measure up to the PMI standards. The consolidated director’s competency includes;
- Decision Making
- Business minded
It was found that the Portfolio Manager Competences aligns with most director competency frameworks from around the world.
Project governance gives project professionals a lead in corporate governance. The experience of project professionals in project governance should give them an advantage at corporate governance level because project leadership is based on project governance. Project professionals should seek these positions in corporate governance. And organisations should not shy drawing board members from the project professionals.
Read the first part of the series: Corporate Governance Knowledge for Project Professionals: Progressing Up Towards the Chief-Level
Read the third part of the series: Corporate Governance Knowledge for Project Professionals: Effective Corporate Governance in the Management of PMI Chapters