Governance can be described as a process for directing and managing projects, a system for holding projects accountable and controlling them, and a framework for the effective assignment of specific and overall accountability for delivering the project. It is a set of policies, principles, rules, and supporting practices put in place to run a project.
The importance of good project governance as a critical success factor in delivering major infrastructure projects is widely acknowledged. Similarly, a lack of sound project governance is well recognised as a major contributor to project failure.
It is therefore essential that formal governance arrangements be established for all major projects, including alliances.
However, the legal structure of an alliance, involving multiple parties with collective responsibilities, presents additional complexities which require governance to be implemented at two levels:
'Outside' the alliance
This refers to the governance requirements that Owners consider for any major project regardless of the delivery method and includes the governance interface between the Owner and the government.
'Inside' the alliance
This refers to the concept of an alliance as a 'virtual organisation' and its internal governance requirements.
Good governance also requires that all individuals involved will have in-depth knowledge in relation to the fundamentals of alliancing and the details of project objectives, deliverables and commercial/legal arrangements.