Last time we touched the importance of senior management commitment. This time we give a look to the portfolio governance. Remember portfolio management: in your professional life as in your private life, portfolio management is about finding the optimal balance between running costs (a.k.a. Business As Usual) and the costs of improving life – i.e. any initiatives to innovate, optimize, making the future yours.

Governance can be defined as having clarity about who takes what decision, and based on which criteria.

It is important that everyone in an organization understands the governance. I am not talking about writing a book; but a minimum – effective – explanation of the different decision levels, escalation paths, the involved roles and their responsibilities and authorities, and the basis for each type of decision should be available, communicated and understood.A pain point often coming back when setting up or improving an existing portfolio management approach is that new governance bodies are called to life. Agreed, there is a need for a committee that takes decisions on where to invest in and what to skip (for now). There is a need for a committee to monitor the progress of the overall portfolio and to initiate actions in case there are issues.But do this need to be different committees? Do this need to be new committees? Or can the respective responsibilities be added to existing governance structures? There are certainly already board meetings that discuss budgets, profit/loss, project progress, etc. Why not adding the portfolio management responsibilities to these existing committees?

You might want to think about the following governance roles in portfolio management:

• Portfolio investment committee – deciding which events to add to the portfolio

• Portfolio progress committee – monitoring portfolio progress and resolving issues

• Portfolio director – responsible for the portfolio strategy and portfolio leadership

• Portfolio manager – coordinating the execution of all portfolio management processes

• Portfolio benefits manager – optimizing benefits realization across the entire portfolio

Another important point is the alignment of meeting schedules. If there is a committee discussing portfolio progress based on dashboards; then ensure that the dashboards are as up-to-date as possible. Ensure that this portfolio progress committee has its advice ready as close as possible to the meeting where decisions are taken on adding or cancelling initiatives. We want to have the most up-to-date data available when portfolio decisions are to be taken. So also make sure the programme and project boards are aligned to these events.

Next time in Portfolio Management-back to the basics: align with the organizational strategy.

Other articles in the series back to basics:

– Senior management commitment

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