Best Practice Governance for Alliances
Project Alliances are a common form of contracting in Australia, with a shift away from the PPP delivery model. An interesting read.
Based on the initial paragraphs from the "Project Alliance paper", here are the key points summarised:
Introduction to Alliance Leadership Team (ALT):
The ALT typically includes representatives from each alliance participant.
It is often chaired by a representative of the owner participant.
Comparison with Joint Venture Companies:
In contrast, a joint venture company usually has a Board of Directors.
The Board is often chaired by someone independent of the company's shareholders.
To provide a comprehensive summary, I'll review more of the document's content.
The document provides a detailed examination of the governance model for project alliances, particularly focusing on the Alliance Leadership Team (ALT). Here are the key points summarized from the content:
Introduction and Common Practices:
The ALT often consists of representatives from each alliance participant and is chaired by the owner participant's representative.
Contrast with joint venture companies, which have a Board of Directors chaired by an independent individual.
Decisions within the ALT typically require unanimous agreement on significant issues such as adjustment events, changes to the commercial framework, and project scope modifications.
Deadlocks in decision-making are addressed through mechanisms like expert determination.
Proposal for an Independent Chairperson:
The document discusses the potential benefits of introducing an independent chairperson to the ALT as a best-practice governance model.
The independent chair could offer a neutral perspective, aiming to achieve consensus among participants and having a casting vote in deadlock situations.
This approach emphasizes the importance of consensus decision-making in alliances, highlighting the balance between individual participant interests and the collective goals of the alliance.
Benefits of an Independent Chair:
An independent chair is likely to prioritize the alliance's interests over any particular participant, potentially leading to more equitable and objective decision-making.
The proposal suggests that an independent chair could mitigate the challenges associated with direct conflict resolution, thereby preserving the relationship among participants.
Conclusion and Recommendations:
The suggested governance model includes engaging an independent chairperson for the ALT, who strives for consensus decisions and has a casting vote in deadlocks.
This model mandates a duty on the chairperson to act in the best interest of the alliance, considering the alliance's objectives and contractual terms.
This summary reflects the document's focus on governance models within project alliances, advocating for an independent chair to enhance decision-making processes and project outcomes.
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