## **Learning Outcomes**

After reading this article, you will understand the purpose and elements of a project governance structure, how to define escalation paths and thresholds, and how governance fits with project methodologies. You will know how project governance aligns with organizational governance systems and why these structures are tested in the PMP exam.

## **PMP Syllabus**

For PMP, you are required to understand how project governance structures are developed and maintained for different types of projects. This involves knowing both practical implementation and exam assessment style. You should review the following:

- Define project governance and explain its role in supporting project delivery and decision-making.
- Establish suitable governance for a project, whether replicating existing organizational governance or tailoring as required.
- Define escalation paths for problems, issues, and decisions, including thresholds for when items are escalated.
- Recognize how governance structure interacts with project methodologies (predictive, agile, hybrid).
- Identify the link between project, program, and organizational governance.
- Understand the responsibilities of project managers under different governance models.
- Know the typical documentation and communication paths for governance.

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. What is the primary purpose of establishing a project governance structure?  
   a) Assigning tasks to team members  
   b) Setting communication protocols  
   c) Defining decision-making and escalation paths  
   d) Creating the detailed schedule

2. Which element is typically included in a project governance structure?  
   a) Project issue register  
   b) Escalation thresholds  
   c) Supplier payment terms  
   d) List of training requirements

3. On the PMP, what is a key requirement for project governance structure?  
   a) It must be built from scratch every time  
   b) It should align with or adjust existing organizational governance as appropriate  
   c) It is not needed in agile approaches  
   d) It is only for projects with external stakeholders

## **Introduction**

Project governance provides the framework for decision-making, accountability, and escalation within a project. Establishing an effective project governance structure is important for consistent delivery, maintaining alignment with organizational objectives, and fulfilling stakeholder requirements. For the PMP, you must be able to explain what goes into a governance structure and describe escalation and decision paths both in writing and under exam conditions.

### Project Governance Structure: Purpose and Scope

Project governance defines how a project is managed, by whom, and under what rules. It sets the boundaries for authority, the escalation of decisions, and the approval of changes or issues. This structure enables transparency, effective communication, and supports delivery by preventing confusion.

> **Key Term: Project Governance Structure**  
> The framework of rules, roles, and escalation paths that guide project decision-making, communication, and accountability. It ensures consistent, traceable, and auditable processes throughout the project life cycle.

### Linking Project and Organizational Governance

A project’s governance structure must fit with the organization’s broader governance framework. In many cases, the project will replicate existing policies and escalation procedures. For unique or high-risk projects, governance might need additional detail.

> **Key Term: Escalation Path**  
> The defined series of steps for raising issues, risks, or decisions beyond their initial owner when thresholds are exceeded or resolution cannot be achieved at the current level.
>
> **Key Term: Escalation Threshold**  
> The predetermined condition or criteria—often set by scope, cost, time, or risk limits—at which an issue or decision is escalated for higher-level attention or approval.

### Building the Governance Structure

The typical process for creating a governance structure is as follows:

1. Review the organization’s standard governance policies and identify any mandated components (e.g., reporting lines, sign-off authority).
2. Define the roles and responsibilities for the project, using the RACI or RAM matrices if required.
3. Specify escalation paths for decisions, problems, and risks, and set thresholds for escalation. These may be values (e.g., cost > £50,000) or types of issues (e.g., legal risk).
4. Document meeting schedules with associated decision and escalation points (e.g., project board reviews).
5. Maintain auditable records of all escalations, decisions, and approvals.

This framework can be used or tailored for different project delivery approaches:

- In predictive (plan-driven) projects, escalation paths and decision gates (phase gates) are often formalized and periodic.
- Agile projects may have escalation mechanisms through roles such as the product owner or through daily stand-ups and retrospectives, but must still define when and how blockers, impediments, or issues are escalated beyond the team.

### **Exam Warning**

> Many exam questions require you to distinguish between project governance and project management. Governance provides the rules and decision paths; project management applies them. Do not confuse the two or assume all projects have identical structures—PMP questions often test your ability to identify when tailoring is required.

### Governance Structure and Escalation Paths

In a well-documented governance structure, all team members know:

- Who is responsible for decisions at each level.
- What types of issues or risks must be escalated (thresholds).
- How and to whom to escalate (escalation path and documentation format).
- Timeframes for escalation and resolution.
- What authority is delegated to the project manager, sponsor, or other roles.

Documented escalation paths should be circulated at the start of the project. In some organizations, escalation may follow a chain: team member → project manager → sponsor → steering committee/board.

> **Key Term: Phase Gate**  
> A formal review and approval point at the end of a project phase to determine if criteria have been met and the project can proceed. Often used to enforce governance in predictive methodologies.

### **Worked Example 1.1**

**A large IT project is suffering repeated delays in vendor delivery. The contract manager cannot resolve a performance dispute. At what point should this be escalated according to a standard governance structure, and to whom?**

> **Answer:** If the contract manager’s delegated authority or a pre-set escalation threshold (e.g., material breach or delay > 2 weeks) is exceeded, the issue should be escalated to the project manager. If unresolved, it moves to the project sponsor. Persistent, unresolved issues or those with major cost or reputational impact should escalate further, typically to the steering committee or executive board as defined in the governance documentation.

### Aligning Governance with Delivery Approach

Governance is needed in all project methodologies, but its form varies. Agile teams may have flatter structures and self-organize, but must still define who escalates blockers and when to involve external parties (such as sponsors, product owners, or steering groups). Predictive projects usually have layered, periodic governance with formal reviews and sign-offs.

### **Worked Example 1.2**

**You are managing a project using agile delivery, but two critical issues remain unresolved at team level after three sprints. What should you do according to best governance practices?**

> **Answer:** Consult the agreed governance structure for agile projects. If the issues meet escalation thresholds (e.g., threaten sprint goals, exceed capacity, or jeopardize value delivery), escalate the issues to the product owner or sponsor. If no resolution, follow the next escalation level, which might involve a project board or senior stakeholders, as documented.

### Adjusting and Documenting Governance

Good project practice is to periodically review the governance structure for effectiveness, especially at phase transitions or after changes. You should record all escalated issues and their outcomes for audit and project closure.

> **Key Term: Governance Documentation**  
> Official documents (policies, matrices, communication plans) that define governance responsibilities, escalation paths, thresholds, and decision authorities for the project.

### **Revision Tip**

> An exam scenario may ask for the "next best step" if an escalation threshold is exceeded. Always refer to the project’s governance documentation and follow the escalation path—never bypass governance to resolve issues informally unless the documentation provides for it.

## **Summary**

An effective project governance structure defines the rules, roles, and escalation paths for decision-making, applies thresholds for when issues should move up, and ensures accountability. The structure should reflect both organizational standards and project-specific needs, fit with the delivery methodology, and be documented and communicated to all key stakeholders. Proper governance is critical for exam success and real-world control of projects.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Project governance structures specify rules, roles, communication, and decision-making boundaries for projects.
- Escalation paths and thresholds formalize how and when issues and risks move up for higher-level decision or intervention.
- Governance must align with or be tailored from organizational policies, and its form may vary with project methodology.
- Documentation of roles, escalation, and approvals is essential for audit and quality control.
- Regular review and communication of the governance structure support consistent and effective project delivery.

## **Key Terms and Concepts**

- Project Governance Structure
- Escalation Path
- Escalation Threshold
- Phase Gate
- Governance Documentation


Project governance and methodologies - Establishing project governance structure