As per the definition put forth by Project Management Institute, portfolio governance is termed as the framework, functions, and processes guiding portfolio management activities to optimize investments and meet organizational strategic and operational goals. The activities are aimed at determining the actual versus planned aggregate portfolio value to discover the portfolio components and deliver maximum return on investment with an acceptable level of risk.
Generally, portfolio management ensures the correct strategic alignment of all components that will help to achieve the overarching organizational strategy. It is responsible for decisions pertaining to resources, such as human, financial, material, equipment, and many more to ensure alignment of the investment decisions. A portfolio manager prioritizes investment as per the need of the project by considering all the organizational constraints. Portfolio governance provides the framework for making decisions, ensuring controls, providing insights, and overseeing integration within the portfolio components.
In an organization, the portfolio governance decisions are made at different levels based on the set authority system. They are responsible to support specific strategies, goals and objectives as defined by the strategic planning process. The manager is responsible to take governance decisions. Thus, portfolio governance guidance and oversight from the organizational or multiple governing bodies. The only requirement is that these governing bodies are always connected with each other so that the effectiveness is achieved and everyone in the organization remains on the same page.
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