As the Kingdom of Saudi Arabia transitions from the phase of designing strategic initiatives to the phase of accelerating execution and achieving impact, the challenge for organizations is no longer just launching projects, but rather their ability to manage project portfolios, control risks, direct capital, measure impact, and make timely decisions.

The importance of this issue increases as the value of projects rises, the involved parties become more complex, and their objectives intertwine with the corporate strategy.

International data and studies indicate the scale of the challenge. According to the research of Bent Flyvbjerg and his colleagues, only a limited percentage of megaprojects simultaneously achieve their cost, time, and benefits objectives. The risks increase as projects become more complex, longer in duration, and more reliant on multiple parties.

Therefore, the question the board of directors should ask is not:

But rather:

Here, the Project Management Office (PMO) transitions from being an operational function to being part of the corporate governance ecosystem.

The Saudi Companies Law, under its currently applicable provisions, does not mandate the establishment of a project management office as an independent organizational structure.

However, the absence of a direct obligation to establish a PMO does not mean the absence of the board's responsibility to oversee the execution of strategic decisions.

The duties of board members include a duty of care, loyalty, and making decisions after being appropriately informed on the subject, along with responsibilities related to conflict of interest, negligence, error, and failure to perform duties.

Hence, a more important question emerges:

What is the mechanism the board relies on to obtain the necessary information to monitor execution and make decisions?

This mechanism could be a PMO, a transformation office, a portfolio management function, or another structure that suits the nature of the organization.

What matters is not the name of the structure, but rather that the organization has a clear system for information, oversight, escalation, and accountability.

Furthermore, documenting the information on which the board bases its decisions, as well as documenting monitoring and escalation processes, can support the ability of the organization and board members to prove that decisions were made within an appropriate, information-based corporate process.

Consequently, a PMO should not be treated as a general regulatory requirement, but as a potential tool for executing governance responsibilities in a measurable and documentable manner.

Not all PMOs are created equal.

A PMO could merely be a function that aggregates reports from project managers and issues a monthly update, or it could be a corporate entity that manages an entire strategic portfolio and possesses clear mechanisms for escalation and decision-making.

The difference between the two models is empowerment.

Operational PMO

• Collects project reports.
• Coordinates updates.
• Measures activity progress.
• Relies on reports submitted to it.
• Escalates observations.
• Focuses on the project.

Empowered PMO for Execution Governance

• Monitors the project portfolio.
• Owns a clear escalation mechanism.
• Links execution to strategic objectives.
• Has direct access to execution data.
• Escalates decisions and deviations requiring intervention.
• Focuses on value, risks, and impact.

Therefore, establishing a new PMO does not automatically solve the governance problem.

An organization might have an operationally strong PMO, but it is weak from a governance perspective if it lacks the authority to access information, escalate, or influence decisions.

True empowerment does not mean giving the PMO a job title or adding general authorities to its charter. Rather, it means building an integrated ecosystem of five elements:

1. Mandate (Scope) It must be clear what falls within the PMO's scope. Does it manage specific projects? Or an entire strategic portfolio? Does it monitor execution only? Or does it monitor the realization of benefits and impact? The more ambiguous the scope, the harder it becomes to hold the PMO accountable or evaluate its effectiveness.

2. Authority It must be determined which decisions the PMO can make, which decisions it can recommend, and which decisions must be escalated to executive management, the board, or the relevant committee. Undefined authority produces unclear responsibility.

3. Access to Information A PMO cannot be asked to monitor execution if the data it needs passes only through the entity whose performance it is evaluating. The PMO needs systematic access to data regarding:

• Budget and expenses.
• Timelines.
• Contracts and procurement.
• Risks.
• Key Performance Indicators (KPIs).
• Resources.
• Actual vs. planned progress.
• Realization of benefits and impact.

Empowerment cannot be exercised without access to information.

4. Escalation An effective charter does not just specify when the PMO submits a report, but determines when the report must turn into a decision. For example:

• A specific cost overrun.
• A deviation from the timeline.
• An elevated risk level.
• Failure to realize a strategic benefit.
• Approval of a material change in the project scope.
• The existence of a decision requiring intervention from a higher level.

Thus, escalation becomes part of the system, not a personal judgment.

5. Accountability It must be clear who is responsible for:

• Execution.
• Decision-making.
• Approval.
• Escalation.
• Addressing deviations.
• Realizing benefits.

The PMO should not turn into an entity that bears responsibility for everything just because it monitors everything.

One of the biggest mistakes in PMO design is focusing on reports instead of decisions.

The organization might issue dozens of reports every month, yet the board of directors lacks clear visibility on the most important question:

Are we still on track to achieve the value we agreed to invest for?

Therefore, the PMO must transition from measuring activity to measuring performance and impact.

Instead of: The project has completed 82% of planned work.

The board should be able to know: What has been achieved? Has the expected impact been realized? What is the deviation? Why did it happen? What is its financial and strategic impact? What is the required decision from the board?

This shift is the essence of execution governance.

You cannot build a modern PMO relying on scattered manual reports and then expect it to provide instant visibility to the board. As the project portfolio grows, data quality and speed of access become part of the quality of governance itself.

Here emerges the true role of digital transformation. A digital PMO ecosystem can connect:

• Project management systems.
• Financial data.
• Contracts and procurement.
• Risk management.
• KPIs.
• Resources.
• Executive dashboards.
• Benefits realization data.

The goal is not to create a prettier dashboard. The goal is to build a single reliable source of truth that allows the organization to transition from:

Data → Insight → Escalation → Decision → Action

When the board can see major deviations in a timely manner, and know their causes, impact, and the required decision, data becomes part of the governance mechanism itself. However, if data is delayed, inconsistent, or distributed across different systems, the mandate becomes of limited effectiveness, no matter how well-written the charter is.

There is no single structure that works for all organizations. The PMO might report to the CEO, a strategic committee, a transformation committee, or another entity, depending on the nature of the organization and the size of the project portfolio.

But the fundamental principle is: The reporting line must align with the level of decision-making authority the PMO possesses.

If a PMO is responsible for monitoring a strategic portfolio, it must have a clear mechanism to deliver material information to the entity authorized with oversight and decision-making. Also, the entity responsible for execution must not become the sole channel through which the information used to evaluate that execution passes.

The goal is not to bypass executive management, but to ensure the existence of an independent and clear corporate path for information and escalation.

Projects associated with government entities or government contracts require an additional layer of discipline.

In addition to internal governance requirements, the PMO design must take into account relevant laws and regulations pertaining to tenders and procurement, variation limits, authorities, contracts, delegation, and approval mechanisms.

This is especially important with the recent regulatory developments in the Government Tenders and Procurement Law in the Kingdom.

Therefore, a PMO charter for government projects should not be adopted merely as an internal organizational document. Rather, it must comply with:

• Statutory authorities.
• Limits of delegation.
• Approval mechanisms.
• Contractual requirements.
• Variation limits.
• Reporting requirements.
• Internal responsibilities.

Any change in the regulatory framework must be reflected in the PMO charter and relevant escalation and approval procedures after reviewing the applicable laws and regulations.

Before approving a project management office, the charter should at least include:

• Clear Scope: Which projects, programs, and portfolios fall within the PMO's jurisdiction?
• Defined Authorities: What can the PMO approve, halt, or recommend?
• Clear Escalation Limits: What level of deviation warrants raising the matter to executive management or the board?
• KPIs Linked to Strategy: Measuring completion percentage is not enough. Cost, time, risks, benefits, and strategic impact must be measured.
• Direct Access to Data: The PMO must be able to access the necessary data to verify the project's status, not rely on a single party's narrative.
• Clear Role in Decisions: It must be defined when the PMO submits a report, when it provides a recommendation, and when the escalation path begins.
• Periodic Review of Effectiveness: The charter itself must be subject to review. A structure might be appropriate when launching the project portfolio, but become insufficient when the value of projects doubles or the organization's scope changes.

1. Do we need a PMO for project management, or do we need a broader system for portfolio governance?
2. What decisions do we want the PMO to be able to influence?
3. Does the PMO have direct access to the data it needs?
4. What deviations warrant escalation, and when?
5. Do our reports measure only the completion percentage, or do they measure value, benefits, and impact?
6. Do current digital systems provide a reliable and unified source of information?
7. Who reviews the effectiveness of the PMO itself and ensures that its granted mandate remains appropriate?

If the answer to these questions is not clear, the problem might not be the absence of a PMO, but rather the absence of a clear model for execution governance.

Establishing a project management office does not in itself represent a transformation in governance.

True value emerges when the PMO becomes a link connecting:

Strategy → Investment → Execution → Data → Risks → Decision → Impact

This requires more than an organizational structure. It requires a clear mandate, defined authorities, access to information, escalation mechanisms, measurable KPIs, and a digital infrastructure that supports decision-making.

For the board of directors, the most important question is not whether the organization has a PMO, but rather:

Can the board see material deviations in a timely manner, understand their impact, and make a decision before the cost of correction becomes higher than the cost of prevention?

An effective diagnostic review begins with assessing the current governance model, reporting lines, decision-making authorities, KPIs, data flows, and escalation mechanisms, then identifying the gaps between the board's responsibility and the organization's actual capability to execute its strategic decisions.

When these elements integrate, the PMO becomes more than a project management office; it becomes part of the corporate infrastructure that transforms strategy into measurable results.