7.1 Introduction to the Chapter

This chapter predominantly is intended to make construction professionals aware of some of the governance requirements on their projects and to present some practical control mechanisms for regulatory adherence. It will explain some of the processes around project approval and the importance of project/programme boards in this regard. Various examples of templates and processes for various stages of the approval process will be given to assist construction professionals understand the level of information required. This is intended as a practical guide or toolkit for encouraging best practice.

7.2 Project Controls

For construction professionals, it is imperative that they understand their roles, responsibilities and authorisation levels when leading their project teams. This will ensure they do not make decisions which have a financial or operational effect on projects which should have been escalated to a higher authority. Normally authorisation levels are established for a given project, or they mirror financial regulations for the client organisation. For construction professionals, having robust decision-making processes whilst ensuring governance procedures are maintained is fundamental; avoiding unnecessary delays whilst not infringing financial regulatory requirements.

7.3 The Importance of Project/Programme Boards

The main purpose of these boards is to provide governance and transparency on projects, and avoiding the responsibility and accountability for decision making falling to one individual. Having project and programme boards should facilitate a cross-disciplinary approach to manging the governance of projects, which is especially important when large capital investment is involved. Furthermore, it also allows for additional resources to be committed to and creates joint accountability for decision making and project progress.

It is normal for project boards to approve various stages of projects and manage any major variations and deviations. Accordingly, decisions can be taken by those individuals who make up the project boards depending on the financial impact. In some cases, if the value of a decision-making process exceeds the authorisation level of the project board then the decision making needs to be escalated to a higher level. Under normal situations, this higher level could be the client executive team. Notwithstanding this, some public sector bodies, which can include universities or local authorities, sometimes have a hierarchy of boards that need to be reported to for seeking project or programme approval.

One example, in the context of the university sector, is illustrated in Figure 7.1 which shows a Project Board reporting to Programme Board, which in turn reports to a Finance and Resources Committee and ultimately a Governing Council/Board of Governors.

Limits of authority for each board will be clearly set down in governance and financial regulations and examples of these were referred to in the last chapter. Construction professionals need to be mindful when their projects require a higher tier of approval within their respective organisations, that they allow sufficient time in their project programme for the approval process. The reason for this, is that normally higher-level boards will only consider those capital projects that have been approved by lower boards, and for which robust business cases and reports recommending reasons for approval are clearly set down. Where some boards are not convened on a frequent basis, e.g., every quarter, project planning around critical milestones where approval need to be received are crucial for avoiding programming delays.

7.4 Gateway Processes for Project Approval and Business Cases

In considering the approval processes for projects through the individual boards, it is commonplace for robust and financially rigorous business cases to be prepared to support business ventures. In some organisations, mostly public sector, there may be ‘gateway processes’ which require staged approval depending on the stage and development of projects. An example, taken from a UK university governance process could be as follows:

When considering the above Gateways 1, 2 and 3, the flowchart in Figure 7.2 could be helpful in illustrating how each of the gateways are integrated into an overall process for approving projects, at the various board levels and design stages.

7.5 Summary

This chapter has articulated the importance of construction professionals having robust financial processes in place. Accordingly, it is imperative that they understand their roles, responsibilities and authorisation levels when leading their project team. Furthermore, it is important for construction professionals to have robust decision-making processes in place within their respective organisations whilst ensuring governance procedures are maintained.

Project and programme boards are normally the vehicle by which the decision-making process is governed. Their main purpose is to provide governance and transparency to projects, and avoiding the responsibility and accountability for decision making falling to one individual. With this in mind, where the value of a decision-making process exceeds the authorisation level of the project board then the decision making needs to be referred to a higher level. Accordingly, construction professionals need to be mindful when their projects require a higher tier of approval within their respective organisations, that they allow sufficient time in their project programme for the approval process.

In considering the approval processes for projects through the individual boards, it is commonplace for robust and financially rigorous business cases to be prepared to support the business venture. In some organisations, mostly public sector, there are gateway processes for project approval and business cases. The gateway processes will highlight different levels of approval for projects depending on which design stage they are at. Practical examples and templates of gateway applications, supported by business cases have been presented in this chapter, to assist readers in this regard.