Projects affected by Social and Governance factors
Projects affected by Social and Governance factors
Project performance can be influenced by factors in projects which address social and governance issues. There are protests around the world, and the growing number of pandemic cases pays more attention to the importance of healthy social and governance concerns. Given these factors it is no longer sufficient to just meet the project objectives, unless the objectives include long term impacts on the environment, social fabric and the way we manage ourselves, projects and organizations. Projects are aspects of the overall organization, in turn organizations are aspects of society overall. The way we behave and perform in our projects may reflect the way we behave within relationships, families and communities.
Within this context social concerns address diversity, human rights, animal rights and consumer protection. From a practical perspective, there is the value of the “power of difference.” Diversity is valuable because it promotes agility and innovation, it enables getting the right people for the job. At the project level, we value the diversity of ideas because the confrontation among diverse perspectives can result in better solutions, designs and plans.
The benefit of the power of difference is only achievable if the decision-making process is healthy and there is open-mindedness among the stakeholders. There can be no real change without a commitment from the highest levels of organizations, and the willingness on all levels, to confront issues in society in general and to acknowledge the value of diversity.
One of those factors is human rights concerns which include but are not limited to consideration of the impact by decisions, products and services on local communities. Covering aspects of health and welfare of employees, which do not just stop at the project or organizational boundary. The entire supply chain is subject to scrutiny.
It is a continuous challenge to increasingly stand up for human rights when the value and the requirements of the organization differ. Is it detrimental to speak out and stand up for values by refusing to make or support decisions that are contrary to one’s values?
Over the years there has been an increasing recognition of the responsibility of organizations to protect the lives and well being of consumers. At the project level we have seen instances in which hitting deadlines or keeping costs down have resulted in damages to consumers because project managers and their leadership have ignored quality control and assurance concerns raised by project performers.
While animal welfare as a social consideration is controversial, investors are increasingly seeking information regarding the practices of companies and communities that abuse animals in the pursuit of profits. At the project level this concern can influence supplier decisions, the design of research projects, and the treatment of animals in farming and food processing.
Governance influences the ability of organizations and projects in particular to value and promote healthy environmental and social policies and practices. Effective governance considers the long term and accepts the reality of uncertainty. On the project level, risk management and the degree to which it is performed remains a controversial activity. Some stakeholders become certain of a desired outcome and dismiss the reality of adverse conditions and alternative outcomes. Without effective and open-minded risk management, projects and organizations suffer avoidable costly and damaging consequences.
While the future is uncertain, there is evidence that awareness of both Social and Governance factors is essential. Arguably, it has impact on profits, as investment criteria will lead to a future that is increasingly livable. Filtering down to the project level, being aware of social and governance factors can lead to more effective decisions and more successful projects.