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Steering Committees

Steering committees provide a formal and effective mechanism for organisations to co-ordinate and monitor project activities. Members review and approve business/project strategy, thereby providing high-level direction and control over projects. Steering committees exist in different forms and titles because of semantic confusion about their meaning (Lechler and Cohen 2009). For example, the terms 'steering committee' and 'advisory committee' are used interchangeably (Kerr 2005), or reference is made to the 'project board' (Mueller 2009).

ENSURING PROJECT SUCCESS

Research into the responsibilities and activities of steering committees is scarce. Broadly, the steering committee is responsible for the successful development of projects. It does so by monitoring the performance of the project team in achieving project objectives within the required parameters of time, cost, quality and so on. Specifically, the committee should focus on the following activities (Lechler and Cohen 2009). First, provide a co-ordinating mechanism between the structural components of project governance. Relationships are developed between members of the steering committee representing the board of directors, project sponsors and project managers. Second, exercise oversight such as insisting on the use of acceptable standards and compliance with policies on project activities.

Research, however, has not established a link between the performance of the steering committee and value-creation in organisations. Steering committees were found to play an important role in strategic corporate planning but not in project performance or the value projects deliver (Lechler and Cohen 2009). They were unlikely to play a part in daily project decisions, although they could participate in exceptional cases. Even if they were involved, they could have a negative effect on project performance by causing project implementation delays, instigating organisational conflict or through dysfunction of the committee. The general conclusion was that 'the probability of project success or failure cannot be predicted exclusively from the presence or absence of a steering committee' (Lechler and Cohen 2009: 51).

FUNCTIONING OF THE STEERING COMMITTEE

Steering committees encompass different memberships and levels of authority and are subject to organisational culture. They are typically chaired by the project sponsor and also include the project manager. Additional members are user managers, major suppliers and stakeholders, executive management and, as required, subject matter experts. The benefit of having senior management on the committee ensures that they 'buy into' the project and thereby increase the legitimacy of the project.

Authority to make project decisions is determined by project disposition (McKeen and Guimaraes 1985). This is generally determined by the size of the project investment, and predetermined authority cut-off levels may exist. Depending on the project investment and authority level, it is the steering committee, the project sponsor or a combination of both that approves or rejects the project proposal.

Group behaviour in steering committees is complex. For instance, political preferences may override or supplement the economic rationale for investing in a project. Negotiation and bargaining take place when organisational resources are scarce. Much of the behaviour is determined by human resource management practices and influences of leadership styles and organisational culture. For more detail refer to Chapter 6.

Decisions are made on a group basis since a broad representation of project stakeholders comprises the committee. The approach differs from individual decision-making processes where the final decision is made by a person or department. Within the committee structure, reliance is placed on interpersonal communications and compromise. In the eyes of other organisational members, decisions made by the committee are often regarded with a degree of credibility and acceptability since it is assumed that the committee has acted in the best interests of the organisation.

On the other hand, the nature of projects and the composition of the project steering committee can affect the veracity of the decision reached. As a result, a portfolio with projects of a distinctive profile may result. McKeen and Guimaraes (1985) provided examples of biases towards selecting projects that support the corporate plan (which may not be up to date), large projects (they may be perceived to have a greater impact), horizontally integrated projects as they are easier to project manage (because they are within the same functional area), or those supported by formal and in-depth proposals (since they provide assurance of financial integrity).

PROJECT RISK GOVERNANCE RESPONSIBILITIES

Selecting projects for inclusion in the project portfolio and then for development is a vital function of the steering committee. How well the project portfolio and projects reflect corporate strategy depends on the efficacy of the selection process. The decision to include one project may preclude the inclusion of another, depending on the selection criteria that are applied. They should include consideration of resource requirements and, importantly for PRG, the nature of strategic risks in projects. Decision-making should be guided by sound policies and procedures, including those for recognising project risk and identifying the potential for formulating value-creating and value- protecting strategies.

By including a broad spectrum of project stakeholders, the committee is able to provide effective oversight over the execution of PRG. Members of the board and the executive are best suited to evaluate and approve the risk profile of the project portfolio and project programmes. Project sponsors and project managers have the detailed knowledge to assess the impact of project risks in business cases and during value realisation processes. As a cohort, they should develop a set of metrics by which the progress and success of PRG can be measured.

Unger et al. (2012) referred to the high-level activity of seeking strategic alignment between business and projects and the lower-level involvement in project operations as fulfilling 'broker' and 'steward' governance roles, respectively. The steering committee acts as a broker by facilitating PRG in linking projects and top management. In a steward capacity, the committee provides the resources, standards and methodologies necessary for project risk management.

As the committee gains experience with the project selection process, its positive approaches and expertise are reinforced and become institutionalised in ways that are observable. The same applies to its PRG responsibilities. Organisational learning takes place over time, enabling the committee to identify projects that are more likely to receive organisational acceptance, and to understand the factors that are critical to project success and thus avoid project failure.

Checklist: Responsibilities of Steering Committees for Project Risk Governance

• Do steering committees provide high-level direction for projects?

• Do steering committees provide high-level control over projects?

• Do steering committees provide high-level co-ordination of projects?

• Does the membership of steering committees adequately represent project stakeholders?

• Are decisions on steering committees reached by consensus?

• Do steering committees participate in selecting projects for the project portfolio?

• Do steering committees participate in determining the risk profile of the project portfolio?

• Do steering committees act as a 'broker' in facilitating the strategic role of project risks?

• Do steering committees act as a 'steward' in providing resources for managing project risks?

• Do steering committees participate in evaluating the performance of PRG?

 
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