This article originally appeared as part of The Vendor Edge series on LinkedIn. This is an expanded and updated version for kieranengels.com.
Sponsors routinely underinvest in governance because governance looks like overhead. It feels like bureaucracy. The real cost is downstream: scope drift, vendor misalignment, rework, leadership time consumed by decisions that should have been resolved upstream. Every dollar not spent on governance clarity at the beginning generates multiples in hidden cost downstream. This is the pennywise-pound-foolish problem of clinical development. Governance is not bureaucracy. It is the system that prevents waste.
KEY TAKEAWAYS
Key Takeaways
- Governance underinvestment looks like cost savings but generates multiples in downstream rework, scope drift, and leadership overhead.
- The hidden costs of poor governance include scope creep (10-30% of timeline), vendor misalignment (months of rework), and leadership time (escalations that should have been prevented).
- Governance clarity in four areas prevents most downstream failures: decision rights, KPI definition, change management, and accountability structure.
- Sponsors who invest in governance upfront move faster downstream because decisions are clear, expectations are aligned, and problems are caught early.
- Governance is not bureaucracy. It’s the infrastructure that prevents the cascade of small misalignments that become big problems.
The conversation happens in almost every sponsor organization. Finance is pushing back on oversight costs. Someone says, “Do we really need this level of governance?” Someone else says, “That feels like overhead. Let’s strip it back and move faster.”
Understanding the Fundamentals
And then eight months into the program, the timeline has slipped. Scope has drifted. The vendor is saying the requirements were unclear. The team is in constant firefighting mode. And the cost overrun is three times what the governance investment would have been.
This is the pennywise-pound-foolish problem of clinical development. Sponsors underinvest in the clarity that prevents problems and then spend multiples managing the problems they could have prevented.
The Real Cost of Misalignment
Let’s be clear about what governance actually is. Governance is not bureaucracy. Governance is the system that prevents the cascade of small misalignments that become big problems. It’s decision rights. It’s clear KPIs. It’s change management. It’s a feedback cadence that lets you catch misalignment early instead of discovering it after months of execution.
The cost of poor governance is not visible. That’s why it gets underfunded. A governance failure doesn’t show up as a line item. It shows up as scope creep. It shows up as a vendor saying they didn’t understand what you needed. It shows up as a timeline extension that wasn’t planned. It shows up as leadership time spent on decisions that should have been resolved upstream.
Building Governance Infrastructure
At Seuss+, Kieran Engels has modeled the hidden cost of governance underinvestment. Sponsors with weak governance structures typically experience 10 to 30 percent scope drift over the course of a clinical development program. That’s not because the science changes. It’s because decision-making authority was never clear. So decisions get made, unmade, and remade as different stakeholders weigh in at different times.
Governance underinvestment also generates vendor misalignment costs. A vendor that wasn’t given clear requirements upfront will misinterpret what they’re supposed to deliver. That misinterpretation doesn’t get caught until they’re already three months into execution. Then you spend six weeks negotiating what was actually supposed to happen. Then they have to rework it. That’s months of delay and cost that could have been prevented by investing in clarity at the kickoff.
The Speed Advantage
The other hidden cost is leadership time. Sponsors with weak governance structures have escalations coming up constantly. A decision needs to be made and no one is clear on who should make it. So it goes to the sponsor’s leadership. A vendor is pushing back on a requirement and no one is clear on what the requirement actually is. So it becomes a leadership conversation. These escalations consume hundreds of hours per year. They distract from strategy. They slow down everything else.
Governance clarity in four areas prevents most of this cascade. Decision rights. Who actually decides things? What decision authority does the sponsor’s leadership have? What authority does the vendor have? What happens if you disagree? If that’s not clear, you’ll spend months discovering it through conflict.
KPI definition. What does success look like? What are you actually measuring? What is the vendor accountable for? If that’s not defined before execution starts, you’ll spend the whole program arguing about whether the vendor is delivering or not.
Change management. How do you handle scope change? Who approves it? What’s the process? If that’s not clear, every change request becomes a negotiation. Scope drift accelerates.
Accountability structure. What’s the feedback cadence? How often do you review performance? What happens if something isn’t on track? If that’s not in place, problems don’t surface until they’re disasters.
Investing in these four things upfront costs time and focus. It’s weeks of conversations with stakeholders about what they actually need and what authority they’re comfortable delegating. It’s negotiation with the vendor about what they’re accountable for. It’s not fast.
But it prevents the alternative. The sponsors who move fastest in clinical development are the ones who got the governance clarity done first. They move faster downstream because decisions are already made. Expectations are aligned. Problems get caught early because there’s a feedback structure in place. Vendors are clear on what they’re accountable for so they deliver on it rather than discovering misalignment months later.
Kieran Engels has seen sponsors try to skip the governance work and move fast. They all end up slower downstream. The governance work doesn’t compress. It just gets moved from the planning phase to the crisis management phase. And in the crisis management phase, it’s more expensive and more costly.
This is also why governance is not a luxury for well-resourced sponsors. It’s a necessity for fast execution. The sponsors with the least budget can least afford to have scope drift, vendor misalignment, and leadership overhead consuming their timeline. They’re the ones who need governance the most.
Governance Investment vs. Downstream Cost Impact
| Governance Element | Upfront Investment | Typical Downstream Cost If Missing |
| Decision rights clarity | 2-3 weeks of stakeholder alignment | Months of escalations and conflicting decisions; 50+ hours/month of leadership time |
| KPI and success definition | 1-2 weeks of vendor negotiation | Constant dispute about vendor performance; 30% of time spent on accountability arguments |
| Change management process | 1 week of process definition | Uncontrolled scope creep; 10-30% timeline extension |
| Feedback and escalation cadence | 1-2 weeks of rhythm establishment | Problems discovered late; reactive firefighting instead of proactive management |
| Vendor staffing model clarity | 2-3 weeks of proposal evaluation | Continuity failures; months of rework due to resource turnover |
| Requirements clarity and sign-off | 3-4 weeks of requirements definition | Rework; vendor claims misalignment; 100+ hours of re-negotiation |
| Total governance upfront | 10-15 weeks | 500-1000+ hours of downstream overhead, 10-30% timeline extension, 20%+ cost overrun |
Every dollar you don't spend on governance clarity at the beginning becomes five dollars of hidden cost downstream. Governance is not overhead. It's the infrastructure that prevents waste.
Key Industry Data
70% of clinical trials experience delays, with more than half related to site activation challenges in multi-country programs. (Source: Tufts CSDD)
The EU Clinical Trials Regulation mandates assessment timelines of 50 to 81 days from submission to decision. (Source: EMA)
North America now accounts for only 27% of global trial starts, while Asia accounts for 30%. (Source: Citeline/Statista, 2021)
The Asia Pacific region contributed more than 50% of the 70,000 new clinical trials registered between 2017 and 2021. (Source: Citeline)
Over 452,000 clinical trials are registered globally, with nearly 65,000 actively recruiting as of 2023. (Source: WHO Clinical Trials Observatory)
Frequently Asked Questions
Model it. Track the hidden costs on programs with weak governance: scope drift percentage, leadership hours spent on escalations, timeline extensions, rework costs. Compare them to programs with clear governance. The data makes the case. Governance investment prevents more cost than it creates.
No. Governance clarity is a prerequisite for fast execution, not a parallel workstream. When you try to build governance while executing, you end up stopping and starting execution constantly as governance issues emerge. The programs that move fastest are the ones that got governance clear first.
You can retrofit governance, but it’s harder and more costly than building it upfront. You have to get alignment on decision rights with people who may have already been making decisions. You have to introduce KPIs that might conflict with current expectations. The earlier you can establish governance clarity, the cheaper and easier it is.
Watch for the signals of governance failure: constant escalations, unclear decision authority, scope creep, vendor misalignment, rework cycles. If you’re seeing more than one of these, you’re underinvesting. The absence of these signals means your governance is working.
Standard governance frameworks save time and prevent reinventing the wheel. But they have to be tailored to your sponsor organization, your vendor relationships, and your decision-making culture. Generic governance that doesn’t fit your organization’s way of working becomes bureaucracy. Customized governance becomes infrastructure.
About the Author
Kieran Engels is CEO and Co-Founder of Seuss+, a strategy and execution partner helping biotech sponsors optimize vendor relationships across clinical development. With more than a decade of experience in vendor governance, risk management, and clinical trial execution, Kieran works with biotech leadership teams to build the oversight systems that protect timelines, budgets, and data integrity. Learn more at seuss.plus.
