How does governance impact project portfolio management?

Governance plays a crucial role in project portfolio management by establishing the framework for decision-making and ensuring accountability. This framework helps organizations determine which projects to prioritize, how resources should be allocated, and what criteria should be used to evaluate project performance and alignment with organizational strategy.

By implementing governance structures, organizations can create a clear set of guidelines and processes that define roles and responsibilities. This not only fosters transparency in decision-making but also promotes a culture of accountability among stakeholders. Consequently, governance ensures that decisions made regarding the project portfolio are aligned with the organization's strategic objectives and that any risks or issues are managed effectively.

In contrast, the other options do not accurately reflect the role of governance in project portfolio management. Governance is not about eliminating decision-making, as effective governance requires active decision-making processes. It is also not limited to financial metrics; while financial performance is important, governance encompasses a broader range of considerations, including strategic alignment, risk management, and stakeholder engagement. Lastly, governance is not merely concerned with project execution; instead, it provides the necessary framework and oversight that guides project selection, prioritization, and ongoing evaluation, all of which occur across the entire lifecycle of the project portfolio.