Variations on governance structures for projects

The governance structure may vary, for example to reflect the procurement methodology or the magnitude of the investment.

Basic project governance structure

Figure 8 sets out a basic structure for governance of projects. Note the number and type of work stream leaders may differ according to the nature of the project and may report through a project manager to the project director.

Figure 8: Basic project governance structure[1]

Separate entity project governance structure

Occasionally the investment may warrant the establishment of a separate entity to manage the project and subsequent operation and ongoing management of the investment (refer Figure 9). For example:

·      statutory authority – Linking Melbourne Authority (LMA);

·      authorised office – Regional Rail Link Authority; and

·      joint venture – Bioscience Research Centre – DPI/Latrobe University.

Under this model the Minister will usually appoint an independent chair for the board. The Board is accountable not only for the delivery of project outputs, but also for the ongoing performance of the investment after the project delivery is completed and the project team disbands.

Figure 9 Statutory model

Alliance project governance structure

The Alliance Practitioner Guide provides a typical alliance structure (Figure 10). The Guide describes three variants on this model (refer to the Guide for further information) reflecting the experience of the owner and the complexity of the project:

·      Model 1 can be used where the Owner is well experienced in alliancing contracting or the project is relatively straight forward and can be governed within the owner’s existing corporate structures.

·      Model 2 involves a Project Control Group (PCG) to provide advice to the owner in particularly complex projects. For example, the PCG may be chaired by the CEO and include members of the Owner’s Statutory Board. The PCG may also include public officials external to the Owner corporation – for example, members of the PCG may be drawn from other agencies/Government departments.

·      Model 3 would be appropriate for particularly complex and very large projects. The government may establish a separate legal entity to provide the required external project governance, assuming the role of owner. The key advantages of this approach include:

–      allowing the owner to focus on its existing core business without becoming overwhelmed by the project;

–      providing the necessary strategic focus of a senior group who are removed from the pressures of day‐to‐day management; and

–      providing the project with the appropriate balance of independence and controls in relation to the speedy decision‐making required to facilitate an effective alliance.

Figure 10: Typical alliance structure

It is important to remember that while the Alliancing Leadership Team is managing and working together to deliver the project, the organisation still needs to have separate governance in place for the investment. This may be through the corporate governance function. 


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