Infrastructure projects are some of the most complex and high-stakes undertakings that organisations can undertake. They require significant investment, coordination of multiple stakeholders, and a long-term commitment to delivering value.
To help organisations navigate these challenges, the Infrastructure Governance Code has been collaboratively developed by industry practitioners to provide a set of best practices and principles for managing infrastructure projects.
Here are 10 things you need to know about the Project 13 Infrastructure Governance Code:
1 - Outcomes and objectives
The Infrastructure Governance Code (IGC) emphasises the importance of clear, measurable outcomes and objectives for any infrastructure project. These should be established at the outset of the project, and should be consistent with the overall strategy and goals of the organisation.
The IGC also stresses the importance of regular reviews and updates to ensure that the project remains aligned with these outcomes and objectives, and that any necessary adjustments are made in a timely manner.
2 - Risk management
Effective risk management is a key component of the IGC, and the code lays out a number of specific measures that organisations should take to identify and mitigate potential risks.
This includes a thorough review of risks to achieving the defined outcomes, which should encompass both risks that lie outside of the project’s direct control and high-impact, low-probability risks.
The review should also take into account factors such as safety, reputational, environmental, social and data management risk.
Additionally, the IGC recommends the establishment of subcommittees to provide an independent view of risk management and assurance, and regular monitoring and review of the project’s risk management and internal control systems.
3 - Board and leadership capabilities
The IGC stresses the importance of having the right capabilities in place within the board and leadership of the project, and the code lays out a number of specific measures that organisations should take to ensure this.
These include a formal review of the board, at a minimum annually, to ensure that it has the appropriate capabilities and representation.
In addition, the IGC recommends that board competencies and capabilities be formally reviewed on an ongoing basis, and that arrangements be established for succession planning both for board members and wider key enterprise leadership roles.
Furthermore, the IGC stresses the importance of investing in and developing the workforce, and of having remuneration policies and practices that support the successful execution of the project and attainment of outcomes.
4 - Data Management
Data Management is a critical aspect of any infrastructure project, and the IGC emphasizes the importance of having a robust data management strategy in place.
This should include clear policies and procedures for data collection, storage, and analysis, as well as measures to ensure the security and privacy of data.
Additionally, the IGC recommends that organisations establish a data governance committee, to provide oversight and guidance on data management issues.
Organisations should also regularly review and update their data management strategies to ensure they remain aligned with the project’s outcomes and objectives, and that any necessary adjustments are made in a timely manner.
5 - Independent review and assurance
The IGC places a strong emphasis on independent review and assurance, and the code lays out a number of specific measures that organisations should take to ensure this.
These include the establishment of subcommittees to provide an independent view of risk management and assurance, and regular monitoring and review of the project’s risk management and internal control systems.
Additionally, the IGC recommends that organisations conduct regular independent reviews of the project’s outcomes and objectives, and that any necessary adjustments are made in a timely manner.
The report also recommends the use of external auditors to assess the effectiveness of the project's controls and processes.
6 - Transparency and communication
The IGC places a strong emphasis on transparency and communication, and the code lays out a number of specific measures that organisations should take to ensure this. These include regular updates to stakeholders on the project’s progress, and clear, accessible reporting on the project’s outcomes and objectives.
Moreover, the IGC recommends that organisations establish clear channels of communication with stakeholders, and that they actively seek out feedback and input from stakeholders throughout the project.
This can include holding regular stakeholder meetings, setting up online platforms for stakeholders to provide feedback, and creating opportunities for stakeholders to visit the project site and see the progress firsthand.
By fostering open and transparent communication, organisations can build trust with stakeholders and ensure that everyone is informed and engaged throughout the project.
7 - Review of Risks and Uncertainties
Properly identifying and managing risks and uncertainties is crucial to the success of any infrastructure project.
The IGC lays out a comprehensive approach to risk management that includes reviewing both internal and external risks, as well as considering a wide range of factors such as safety, reputation, environment, social, and data management.
It also establishes subcommittees to provide an independent view of risk management, and requires the board to monitor the project's risk management systems and carry out an annual review of their effectiveness.
8 - Right Capabilities at the Right Level
Having the right people with the right skills and experience in key leadership positions is essential to the success of any infrastructure project.
The IGC puts a strong emphasis on ensuring that the board and leadership team have the necessary capabilities to meet the challenges of the project, and that there is a pipeline of talent to deliver it.
It also includes provisions for independent non-executive directors, diversity of thought and representation, and remuneration policies that support the successful execution of the project.
9 - Compliance and Reporting
The IGC also includes provisions for ensuring compliance with relevant laws and regulations, as well as reporting requirements.
The board is responsible for ensuring compliance and for implementing effective internal control systems. The code also requires the board to conduct regular reviews of compliance and to report on compliance in its annual report.
10 - The Board and its Subcommittees
The board establishes subcommittees to provide it with an independent view of risk management and assurance. These subcommittees are responsible for reviewing and reporting on specific areas of risk, such as safety, reputational, environmental, social and data management risk.
The board also monitors the project’s risk management and internal control systems and, at least annually, carries out a review of their current and retrospective effectiveness. This review is included in the board's report and covers all material controls, including financial, project, and compliance.
It is important to note that the board's role in risk management is not limited to identifying and mitigating risks, but also includes monitoring and reviewing the effectiveness of the project's risk management and internal control systems. This helps to ensure that the project is able to respond quickly and effectively to emerging risks and uncertainties. The board's subcommittees play an important role in this process by providing an independent view of risk management and assurance.
In conclusion, the Infrastructure Governance Code sets out a comprehensive framework for the governance of infrastructure projects. It covers a wide range of areas, including leadership, decision-making, risk management, and workforce development.
By following the principles and provisions outlined in the code, boards can ensure that their projects are delivered successfully and that value is optimised for all stakeholders. The code serves as a useful guide for boards and project leaders in making strategic decisions and managing risks, ultimately ensuring the success of infrastructure projects.