Program
Governance
Dr. Muhammad Ehsan Khan
Best Practices and Advances in Program Management Series
Program
Governance
Best Practices and Advances
in Program Management Series
Series Editor
Ginger Levin
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Program
Governance
Muhammad Ehsan Khan
CRC Press
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This book is dedicated to my grandfather, Muhammad Yahya Khan,
who was a professional educator for more than 50 years. Throughout
his life, he guided and taught professionals who are now contributing
to the development of nations. I pray for his departed soul!
Contents
Prologue............................................................................................... xiii
Acknowledgments................................................................................. xv
Author..................................................................................................xvii
Section I Foundation of Governance
Chapter 1 Governance.......................................................................... 3
Defining Governance...................................................................4
Governance at Multiple Levels...................................................5
Summary.......................................................................................6
References......................................................................................7
Chapter 2 Transaction Cost Economics.............................................. 9
Transactions—Core Elements and Attributes.......................11
Behavioral Assumptions.......................................................12
Governance Structure Attributes........................................12
Hazards of Concern...................................................................13
Incomplete Contracting........................................................13
Bilateral Dependency and Fundamental
Transformation......................................................................14
Adaptation or Maladaptation..............................................14
Linking Governance, Governance Structures, and
Contracts.....................................................................................15
The Impact of Asset Specificity and Behavioral
Assumptions on Contracts........................................................17
Application to Projects and Programs....................................18
Summary.................................................................................... 20
References....................................................................................22
Chapter 3 Agency Theory.................................................................. 23
Agency Problems and Agency Loss.........................................25
Agency Costs and Contracts.....................................................27
vii
viii • Contents
Application and Support...........................................................29
Criticism..................................................................................... 34
Complementary Theories..........................................................36
Stewardship Theory...............................................................36
Resource Dependency Theory.............................................37
Summary.....................................................................................38
References....................................................................................39
Chapter 4 Corporate Governance...................................................... 41
Why Corporate Governance?...................................................41
Defining Corporate Governance............................................. 42
Factors Affecting Corporate Governance and Its
Evolution..................................................................................... 44
Corporate Governance Institutions........................................ 46
The Board of Directors......................................................... 46
Auditors and Their Independence.......................................47
Functions of Corporate Governance...................................... 48
Reporting and Disclosure.................................................... 48
Resource Management......................................................... 48
Risk Management..................................................................49
Performance Management...................................................49
Relationship Management....................................................49
Strategic Oversight................................................................49
Compliance.............................................................................50
The Human Side of Corporate Governance...........................50
Ethics and Ethical Compliance...........................................50
Rationality and Behavioral Aspects....................................52
Design and Implementation Considerations..........................53
Summary.....................................................................................55
References....................................................................................57
Section II Programs
Chapter 5 Temporary Organizations................................................ 61
What Are Temporary Organizations?.....................................61
Projects and Programs as Temporary Organizations.......... 64
Contents • ix
Summary.....................................................................................65
References................................................................................... 66
Chapter 6 Programs............................................................................ 69
Defining Programs.....................................................................69
Program Characteristics...........................................................71
Benefits Delivery....................................................................71
Strategic Focus.......................................................................72
Intended Temporariness.......................................................73
The Need for Integration......................................................73
Uncertainty at the Core........................................................73
Delivering Change.................................................................74
Adaptability to Change.........................................................74
Program Categorization............................................................74
Program Management...............................................................78
Program Life Cycle.................................................................... 80
Formation...............................................................................81
Organization..........................................................................82
Benefits Delivery....................................................................82
Closure....................................................................................83
External Context of the Program.............................................83
Organizational Fit..................................................................85
Program Flexibility...............................................................85
Organizational Stability....................................................... 86
Resource Availability........................................................... 86
Summary.................................................................................... 86
References................................................................................... 88
Section III Program Governance
Chapter 7 Program Governance........................................................ 93
Defining Program Governance................................................93
Why Should Programs Be Governed?.....................................95
Program Governance Perspectives..........................................97
Summary.................................................................................. 100
References..................................................................................101
x • Contents
Chapter 8 Program Governance Domains...................................... 103
Program Structure and Processes..........................................104
Program Resources..................................................................104
Program Strategy......................................................................105
Program Decisions...................................................................105
Escalated Risks and Issues......................................................106
Program Progress.....................................................................107
Program Benefits......................................................................108
Program Stakeholders..............................................................109
Summary...................................................................................110
References..................................................................................111
Chapter 9 Program Governance Functions.................................... 113
Benefits Definition....................................................................113
Governance and Management Framework..........................114
Organizing and Structuring..............................................114
Process and Mechanism.....................................................116
Ensuring Strategic Alignment................................................117
Directing Benefits Delivery.....................................................117
Interfacing and Coordination.................................................118
Reviewing Progress..................................................................119
Providing Governance Oversight......................................... 120
Support and Guidance....................................................... 120
Monitoring and Control.....................................................121
Reporting and Communicating............................................ 123
Authorization and Approvals.................................................125
Summary.................................................................................. 126
References................................................................................. 128
Chapter 10 Program Governance Institutions and Roles................ 131
The Board of Directors............................................................132
Portfolio Management.............................................................133
Executive Sponsors.................................................................. 134
The Program Governance Board...........................................137
The Program Management Office..........................................139
Advisory Panels........................................................................141
Audit Committees....................................................................142
Contents • xi
Generic Roles—The Broker and Steward..............................143
Summary...................................................................................145
References..................................................................................146
Chapter 11 Program Governance Mechanisms................................ 149
Strategic Reviews......................................................................150
Stage Gate Reviews...................................................................151
Periodic Health Checks.......................................................... 154
On-Demand Consultation and Reviews...............................155
Program Audits........................................................................155
Planned and On-Demand Reporting....................................157
Quality Review.........................................................................158
Advisory Sessions.....................................................................159
Summary...................................................................................160
References..................................................................................162
Chapter 12 Factors Affecting Program Governance........................ 163
Organizational Factors............................................................164
Corporate Governance.......................................................164
Organizational Governance Paradigm.............................165
External Factors........................................................................167
Cultural Influences..............................................................167
Legislation, Regulations, and Standards..........................167
Program Attributes..................................................................168
Benefits Delivery Mechanisms...........................................168
Program Structure...............................................................169
Program Uncertainty and Complexity.............................170
Program Life Cycle Stage....................................................171
Program Strategic Value.....................................................172
Program Performance.........................................................173
Differences in Governance Regimes—Some Research.......173
Summary...................................................................................175
References..................................................................................176
Chapter 13 Contingent Governance Framework for Programs
(CGFPrg™)........................................................................ 179
Contingency Theory.................................................................180
xii • Contents
Aligning Agility and Discipline: Contingent
Governance Framework for Programs..................................181
Influential Factors................................................................182
Governance Framework Elements....................................182
Guidelines to Implement a Contingent Governance
Framework for Programs........................................................183
Summary...................................................................................186
References..................................................................................187
Appendix: Glossary of Acronyms...................................................... 189
Prologue
Organizations form programs to achieve strategic objectives that help
them grow and perform more effectively and efficiently. The importance of
these initiatives is such that an oversight function is required from executive management, whose role is to monitor the program ensuring that all
parts are on track, support the program when required, and control different aspects of the program if things seem to go in the wrong direction.
These dimensions of unification form the core of program governance.
The need for program governance comes from the fact that there are
certain aspects of a program that are not under the direct control of the
program manager, and he or she requires support from the program governors to ascertain successful delivery of the program objectives. In addition, the program governors have to ensure that the program activities are
being carried out as planned, and that any major deviations are accounted
for and approved. In the following chapters, for the sake of clarity, all governance entities or roles (such as steering committees, program boards,
program sponsors, etc.) will be grouped together and referred to as program governors.
A few years ago, I was working with a team of software professionals
to develop the first trading platform in the Gulf Cooperation Countries
(GCC) region. The team, I still remember, could be called a star team. We
were a start-up; we needed a team like that one. It was similar to a “band
of brothers” working together to build their dream rather than a pool
of professionals working toward an objective. We succeeded! We created
our dream.
What happened after that is a memory to cherish. However, one of the
key conclusions that we were able to get from the experience was the adaptability of the environment in which we worked. We called it ordered chaos.
We knew we had to change as the context changed. What was important
to us at one stage became insignificant at the later stage, so we changed
ourselves. As the goals became clear, we shifted our approach. We continued to adapt until we reached our destiny. Since then I have been a strong
supporter of using adaptable frameworks to manage teams and work. This
book concentrates on presenting a program governance framework that is
adaptable to the context of the program.
xiii
xiv • Prologue
Section I focuses on establishing an understanding of governance. The
chapters in this section discuss the concept of governance from different
perspectives. This section will be useful for both practitioners and academics who want to understand the core of governance based on its underlying
theories. While reading this section, you will see a number of references
to research that has been carried out in the domain of governance. In
addition, there is a detailed chapter on corporate governance, which has
a strong influence on governance frameworks for projects and programs.
Section II defines programs and related concepts. A detailed discussion
of temporary organizations is described in this section. The concept of
the temporary organization is fundamental to understanding the concept
of projects and programs. Such organizations are formed to meet certain
organizational objectives for a limited period of time and cease to exist
based on predefined conditions such as objective accomplishments.
Section III focuses on program governance and related ideas. This is
where the complete framework of program governance is proposed from
different dimensions. It proposes a new framework for the governance of
programs based on changing context. This section also proposes guidelines for designing and implementing governance frameworks based on
the proposed model.
Acknowledgments
Blessings from the Almighty Allah have been instrumental in my career
and life.
I would like to thank my parents whose prayers and encouragement
have always been a source of energy for me to progress in my life and to
overcome obstacles that otherwise seemed impossible to surmount.
Many thanks and gratitude to my mentors and guides, Dr. Ginger Levin,
Dr. Rodney Turner, Dr. Ralf Müller, and John Wyzalek, who have played
a vital role in developing my authoring capabilities. Without their support
and guidance I would still be a practitioner with ideas, yet unable to translate them into a framework.
I would also like to thank my brother-in-law Muhammad Jamal
Maqsood, CISA, ITIL, for his consistent feedback. He read each and every
chapter of this book and helped me to improve the overall quality of the
content and context.
I would like to thank my grandparents, in-laws, brothers, sisters, elders,
and friends, especially Dr. Abdul Waheed, Mohamed, and Saeed, who
prayed for me, and who have consistently motivated and encouraged me
during this journey.
Finally, a special thanks to my wife (Rafia) and children (Ayaan and
Eshaal Maryam) for their patience, love, and encouragement. They are
my source of motivation, and without their consistent support, the idea
of writing the first book on program governance would still be a dream.
xv
Author
Dr. Muhammad Ehsan Khan, Ph.D., is an entrepreneur and an internationally acknowledged professional on the subject of governance and
management of strategic initiatives. An award-winning strategist with
over a decade of leadership success, Dr. Khan is a founding member
and presently serves as a partner and Vice President of Operations and
Service Delivery for a UAE-based firm, Inseyab Consulting & Information
Solutions LLC.
Dr. Khan did his Ph.D. in strategic, program, and project management
(Major de Promotion/Valedictorian) at SKEMA Business School, France,
and is a certified Program (PgMP) and Project Management Professional
(PMP). He is also the recipient of the 2012 PMI James R. Snyder Award and
was awarded the Young Researcher of the Year award by IPMA in 2013.
Dr. Khan is the designer/originator of Contingent Governance
Framework for Projects (CGFP) and Contingent Governance Framework
for Programs (CGFPrg). In his current capacity at Inseyab Consulting &
Information Solutions, a business intelligence (BI) company, he has collaborated with BI experts to design a BI Framework for Project Portfolios
(BIPPf). An initial version of this framework was presented and well
received at the PMI Global Congress 2014, EMEA. In order to support
other researchers and research publications, Dr. Khan works as a reviewer
for the International Journal of Project Management (IJPM) and was
awarded with a Certificate of Reviewer Excellence for his contributions.
With a special inclination toward strategic planning and governance of
projects and programs, Dr. Khan has provided management, consulting,
and mentoring services in the Middle East region. He has been involved in
the establishment of PMOs, implementation of management/governance
frameworks, and related practices and tools, in order to create an environment of project management excellence. He has also manages medium- to
large-scale ICT programs and projects for various customers, especially in
the government sector.
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