CEO Memo: Project governance
By: Megan Motto FGIA, Chief Executive Officer, Governance Institute of Australia
It’s Public Sector Governance month at Governance Institute, where we look forward to welcoming members and attendees from government organisations across Australia to our annual forum in Adelaide. This year, we are extremely fortunate to have the Commissioner of the new National Anti-Corruption Commission, Paul Brereton to provide some initial insights just months into the role. The NACC is and will be a vital underpinning of good governance in the public sector by investigating corruption, managing conflicts of interest and monitoring interactions between ministers, public servants and other stakeholders. It will go a long way to restore public trust in government, which as our most recent Ethics Index has demonstrated, remains low.
When it comes to governance in the public sector, we have seen some major derailments in recent months on some significant projects of national importance, namely the CHESS replacement project and the Modernising Business Register project. Having been involved in many of the preliminary discussions on these major reforms, it’s disappointing that both projects are seemingly going back to the drawing board.
Governance Institute of Australia welcomed the decision by the Federal Government to scrap the MBR project, but only if a new plan is implemented with upmost urgency. Improving infrastructure and reducing regulatory burden on organisations is one of our major priorities. Business registers are critical infrastructure, and we are well past the time to modernise them. But cost blowouts and poor design made the previous project untenable, and it became clear that the MBR project in its previous form was undermining these initiatives. Action to rectify the situation is urgent, otherwise we will be left with a patched system that has been straining to operate efficiently for many years.
Similarly, the CHESS Replacement Project, initiated by ASX, aimed to replace the aging settlement system with a modern, blockchain-based alternative. The new platform promised to bring improved efficiency, transparency, and real-time settlement capabilities to Australia’s financial markets. But it too has collapsed and is now subject to intense scrutiny by ASIC and the Reserve Bank after numerous delays and concerns about the project’s oversight and governance.
When it comes to major infrastructure, success hinges on more than just meticulous planning and efficient execution. Strong governance plays a pivotal role in ensuring that projects are delivered on time, within budget, and in accordance with the intended scope and quality. It is an essential framework that establishes a clear hierarchy of decision-making, roles, and responsibilities, ensuring alignment with organisational objectives and strategic goals.
Key infrastructure projects are the lifeblood of a functioning society. However, despite their critical nature, time and again we hear reports of major failures that are not merely the result of construction mishaps, unforeseeable delays or natural disasters. They are often deeply rooted in governance failures. Good project governance is the compass that guides a project to success and serves as the first line of defence. By learning from past mistakes and implementing robust governance practices, we can work to ensure that infrastructure projects not only serve their intended purpose but also stand the test of time and deliver the best possible outcomes in terms of safety, quality and efficiency.
Top tips for successful project governance:
1. Have a project charter: A project charter serves as a reference point for decision-making throughout the project.
2. Clearly defined roles and responsibilities: Ensure that all project stakeholders have clearly defined roles and responsibilities, minimising confusion and enhancing accountability.
3. Regular reporting and communication: Establish a transparent reporting structure with regular updates to stakeholders to keep everyone informed and aligned.
4. Risk management integration: Integrate risk management practices into your project governance, enabling a proactive response to potential issues.
5. Scalability: Tailor your governance structure to the size and complexity of the project. A smaller project may require a less complex governance framework than a large, multi-year initiative.
6. Performance metrics: Metrics and key performance indicators (KPIs) are critical for monitoring project progress. Governance establishes which metrics to track and how they will be reported to stakeholders.
7. Continuous improvement: Regularly evaluate your governance framework to identify areas for improvement and make necessary adjustments.
8. Training and education: Invest in training and education for project team members and stakeholders to ensure they understand and can effectively participate in the governance process. For more information on Governance Institute courses, head to our website.
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