Governance Structure and Steering Committee in Project Management

Project Governance Structure: the Steering Committee and Decision-Making Process
Project Governance Structure: the Steering Committee and Decision-Making Process

A steering committee (sometimes called “project governance team”) is a group of people who are responsible for the oversight, operation, and delivery of projects, programmes and portfolios. They clarify decisions about how the agreed scope of work can be fulfilled.

Steering committees oversee the delivery process and establish project governance policies and procedures to help project teams make sure that the projects stay on track and deliver desired results. It reconciles differences and conflicting issues in the roles and responsibilities of stakeholders and ensures that all deliverables are of quality and meet the agreed scope. A project governance committee is effective when it ensures the timely, efficient delivery of satisfactory results.

In this article, we’ll define the term “steering committee” for project management and describe what roles and components are usually involved in project governance structures.

What is a Steering Committee in Project Management?

A project steering committee (aka “project board”) is a senior decision-making authority within the project governance structure that consists of top managers and leaders who provide, review and monitor the strategic direction and policy guidance to the project team and other stakeholders. The project committee also provides recommendations on delivery approaches and participates in discussing general strategies and opportunities for planning and implementation.

Typically, senior stakeholders and high-level representatives of project clients are the members of a project steering committee. Within the project governance framework, the members of the committee are strategically positioned to effectively promote the goals of their respective organizations. Diversity will usually make the project management board flexible and improve decision making.

Who can be members of a project governance committee:

  • Project Manager
  • Project Sponsor
  • Project Owner
  • Business Analyst
  • Client Representatives

Some responsibilities of steering committee members:

  • Strategic planning and review
  • Verifying changes to the Business Case document
  • Approving the Project Charter for accuracy and compliance with the Business Case.
  • Monitoring and controlling the project
  • Managing the relationship and conflicts between the delivery team and other project stakeholders
  • Defining policies and procedures related to project delivery
  • Recommending adjustments to resources and their allocation

Project Charter Checklist

The foundation of a steering committee is generally laid by senior management or other decision makers within an organization. Often this will be a representative from the organization that has contributed to the original project vision who will lead the committee.

What is a Project Governance Structure?

A project governance structure is a framework of authority and accountability that determines how the stakeholders of a project will make, communicate and implement strategic decisions and solve problems that arise throughout the project life-cycle.

Effective project governance structures help project managers to balance conflicting issues and make informed decisions. These structures identify lines of communication, decision rights, and reporting relationships for the people who approve requests for changes in project scope, budget, or schedule. There are three types of governance structure that are used in projects and programs: centralized, distributed or hybrid. The following sections describe them further.

3 Project Governance Models

1. Centralized

A centralized governance structure flows all decisions down from the steering committee to project team and stakeholders, and in some cases, in the opposite direction as well. This type of governance is very common in large projects, where there is little time for coordination and information sharing between committees.

Another reason for adopting a centralized governance structure is that it provides consistent direction throughout the project life-cycle. It ensures that the project is on track and adheres to the agreed scope of work. Another plus is that it simplifies communications and reduces cost and risk.

3. Distributed

In contrast to centralized governance, distributed governance structures keep decision-making authority dispersed among all interested parties. This allows for more flexibility in project decisions while better maintaining accountability.

In a distributed governance structure, decision-making authority is kept in the hands of the project team, with periodic reviews conducted by the steering committee. In a distributed governance system, there are no barriers to changes in scope or budget.

3. Hybrid

A hybrid governance structure blends the positive elements of centralized and distributed models. The steering committee of a hybrid model acts like an internal steering committee; however, it is supported by an external advisory group (or panel).

The hybrid structure is most often used in complex, multi-phase projects that require central strategic decision-making in later phases of the project. The main goal for this type of governance is to take advantage of the best properties from other types while avoiding any serious shortcomings.

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6 Common Questions and Answers

Here below we provide you with answers to some of the most frequently asked questions about the subject matter.

1. Why create a steering committee in projects?

Steering committees are formed in order to enable the project manager to communicate more effectively with key stakeholders and to receive more timely and accurate information about the delivery process than it is achieved in a traditional top-down project management structure.

2. What is the ideal size of the project steering committee?

The ideal size of a steering committee on a project is between 8-15 members, but it is recommended that the size of the committee on any project should be no more than 10 people.

3. What is the steering committee meeting?

The steering committee meeting is a regular forum event through which the project manager communicates with the key stakeholders to review the work progress, schedules, expenditures, etc., and to distribute responsibilities among the team members.

4. What is the purpose of a project governance framework?

A project governance structure is needed for two main reasons: (1) to help ensure that projects deliver acceptable results on schedule and (2) to help protect sponsors from risks associated with the three stages of any project – Planning, Delivery, and Closing.

5. What should be the composition of a project steering committee?

The composition of a steering committee will vary based on the type of project, and it would be based on the following:

  • Project Sponsor: This is the owner of the project and is responsible for obtaining commitments from sponsors to finance and implement projects.
  • Project Manager: The Project Manager is in charge of implementing the objectives and vision communicated by the sponsor into actionable tasks that can be completed in time and within budget.
  • Project Portfolio Manager: This person is responsible for evaluating capital projects against their ability to deliver business value. He/she should be able to understand the business drivers for capital projects, make appropriate trade-off decisions between projects, and accept or reject new projects based on their fit within the portfolio. This role is also responsible for communicating strategic priorities to the sponsor and project manager.

6. Any difference between project governance structure and project management office?

There is no apparent difference between the two. However, the former has many meanings. It is more likely for this article to describe what project governance structure is and what it can be used for. Learn more about PMO.