The Invaluable Project Charter

By David Clark, PMP

The project charter is arguably the most important document of any project life cycle. It not only defines the unique
product, service or result that is needed but also provides the rationale for the project and sets the direction for which
every decision and deliverable throughout the entire project
should be aligned.
Why is a project charter needed?
The primary purpose of the project charter is to
communicate how a proposed solution to a business need
provides value and aligns to an organizations overall
strategy and mission.
In doing so, the charter serves three important functions:
1.

Authorize the Project

2.

Communicate Expectations

3.

Mitigate Risk

1. Authorize the Project

Formal approval of the charter by the project sponsor not only provides the project manager with authority to apply
resources to the project, it also publically declares the sponsors commitment to staff, peers, upper management and
business partners. Projects that lack formal approval run the risk of being derailed or even cancelled.
2. Communicate Expectations
The project charter serves as a communication tool to provide consistent understanding among key stakeholders
regarding aspects of the project. Most importantly, it illustrates what the project is, why it exists and who is impacted.
It provides all the stakeholders with the same information and a basis upon which questions can be addressed.
Without a project charter, stakeholders may draw incorrect conclusions about what the project is and why it exists.
3. Mitigate Risk
The process of creating the project charter provides a huge opportunity to solicit input from key stakeholders and
ensure alignment. Knowing early on that a major aspect of the proposed project has not been considered or that the
project significantly impacts another project helps to avoid future changes that could be costly or detrimental.
Additionally, involving key stakeholders at the onset conveys that their input and support is valued which can help
strengthen relationships and build trust. It is absolutely critical to ensure key stakeholders agree to the contents of the
charter prior to authorization.
What should be included in a charter?
The art of crafting a great project charter requires that it addresses the main points, provides an appropriate level of
detail and ensures its sustainability over time. The main points of the project effectively convey what the project is
and why it is needed. The level of detail must be high enough for upper management to quickly understand the
primary concepts while avoiding low-level project details. And the charter must be written in a manner such that the
contents remain accurate throughout the entire project.
While the type and amount of information contained within a project charter varies, the following information is
recommended for inclusion in every charter:
Business Need
Project Description
Constraints (budget, schedule, resources, quality)
Key Stakeholders

The ideal charter is short, clean and concise. Depending on the unique needs of the project, you might consider
including additional information such as:
Exclusions (items out of scope)
Project Organization
Assumptions
Methodology
Initially Identified Project Risks
High-Level Cost/Schedule Estimates
Project Dependencies
Organization Standards or Policies
Early Termination Criteria
Projects that lack a well-prepared charter run the risk of stakeholder resistance, major change requests, or even
project cancellation. A well-written and properly executed project charter is invaluable to any project.
David Clark, PMP is a senior project manager with Sentry Insurance. He has over 13 years of project management
experience helping companies in manufacturing, financial services, public sector, and insurance industries succeed.
David is a volunteer board member of the PMI Northeastern Wisconsin Chapter and a volunteer board member
providing project management support for the Central Wisconsin Childrens Museum. He welcomes your questions
and comments.