Project Charter

Goal

The project charter is the document, signed by the sponsor, that authorises a project to exist and gives the project manager the authority to apply organisational resources to it. The sponsor is the person who commissions the project and answers for it to the organisation. Before the signature, the project is a proposal. After it, the project has a name, an owner and a budget.

In the PMBOK Guide, the Initiate Project or Phase process belongs to the Governance performance domain. There, authorisation links the project to the business case and to the organisation's strategic goals. The business case justifies the spending; the charter authorises it.

The charter supports one decision: whether to start the project, who owns it and within what limits. The processes that plan scope, schedule, finance and risk then take it as an input. The initiation process also produces the assumption log, which receives the high-level assumptions and constraints set at the start.

The charter is also an agreement between the organisation that requests the project and the one that performs it. When two companies work together, a contract binds them. Each then writes its own charter, which sets out how that company will meet its obligations under the contract.

Usage

When to use

• Business case approved, project not yet started: turn the funding decision into a named mandate with written limits.
• Project manager to be appointed: write down their authority before planning begins.
• Project spanning several departments: state who arbitrates when two departments claim the same people.
• External supplier under contract: plan in-house what the organisation owes the supplier under the contract.
• New phase of a long project: re-authorise what follows on the basis of what the previous phase learned.
• Funds voted by a political body: tie the project to the amount and conditions of the vote.
• Start of an adaptive project: set down on one page the purpose, the customer and the boundaries before the first iteration.

When not to use

• Justification still open: the charter would authorise spending that nothing supports; build the business case first.
• Recurring operational request: there is no project to authorise; handle the request through operations' change management.

Description

What the signature changes

The sponsor, or whoever holds the authority to start the project, signs the charter. The project then enters the organisation's official records. The project manager can commit the preapproved resources within the written limits. Detailed planning begins within the framework that the charter sets for every plan.

According to the PMBOK Guide, the sponsor or the project manager drafts the charter, in collaboration with the initiating entity. Either way, the project manager is appointed as early as possible, ideally while the charter is being drafted and always before planning begins. Whoever drafted the charter knows the project's purpose and the expected benefits. Whoever receives it ready-made discovers its limits by crossing them.

The twelve elements

The PMBOK Guide lists twelve elements in its Table 4-1. Grouped by question, they give the reviewer a checklist: a charter that lacks a group cannot authorise.

Two elements carry the authorisation and are the ones most often missing. The project manager's authority level states what they decide without going back to the sponsor. Without a written threshold, they either escalate every expense or commit none, and every decision is renegotiated. The exit criteria state the conditions under which the project closes or stops. Written at the start, they make stopping decidable. Written once the project is slipping, they are negotiated against the people who have already invested in it.

The charter and its three neighbours

The business case and the benefits management plan are business documents, drawn up before the project and reviewed after it ends. The benefits management plan sets who measures the results after closure and when: a success criterion whose deadline falls after the project ends finds its owner there. The charter is the first document of the project itself. It differs from the scope statement in its level of detail: the charter stays high-level, while the scope statement describes each scope component and is elaborated as the project proceeds. The team charter sets the team's values and working agreements; the kick-off meeting often produces it.

Drafting the charter and getting it signed

Start from the business documents. The business case and the benefits management plan are the inputs the PMBOK Guide names. The charter takes from them the purpose, the expected outcomes and the high-level constraints. For the analysis of alternatives, it refers back to the business case.

Appoint the project manager. The appointment records their name, their share of time in full-time equivalents (FTE), the amount they commit alone and the person to whom they submit the rest. They draft the charter or review every line of it.

Gather what the business case does not say. The business case decides on an alternative. It does not say who arbitrates, what the project manager commits alone or when to stop. These elements come from interviews with the sponsor and with the heads of the departments that supply people, then from a working session that sets the limits. Among the tools of this process, the PMBOK Guide lists interviews, focus groups, brainstorming, facilitation and the responsibility assignment matrix. The matrix records on one page who decides what, and the charter refers to it. The stakeholder list supplies the corresponding element of the charter.

Record assumptions separately. The strategic and operational constraints set in the business case pass into the charter. The assumption log opens with them and receives the lower-level assumptions throughout the project: estimates, specifications, activities. The charter cites the assumptions the authorisation depends on; the log tracks them.

Have it reviewed, then signed. The heads of the departments that supply people review it before signature, because the charter commits their staff. The sponsor signs.

Change it by signature. The sponsor approves the charter and each change to it. A raised budget, a moved deadline or a widened boundary produces a new signed version.

The charter in an adaptive approach

In an adaptive project, the charter ranges from a simple worksheet or vision statement to a moderately detailed document. The PMBOK Guide has it answer all or some of seven questions: why the project is undertaken, who will be engaged, what it is about, where it will take place, when it starts and ends, how it will be run, who the customer is. Visioning answers the third.

A one-page charter still carries a signatory, a committed budget and a named owner. Without them, the team works from a vision that nobody has funded.

The project canvas is a one-page grid divided into blocks. The PMBOK Guide's example has fifteen: purpose, objective, project approval requirements, requirements, deliverables, assumptions and constraints, scope exclusions, resources, milestones, stakeholders, risks, users, project phases, team, lessons learned. The team fills it in during one session, on the wall or on a shared whiteboard. The canvas carries most of the elements of Table 4-1, but it has no block for the exit criteria and none for the authority of the project manager and the sponsor. A team that builds its charter on a canvas writes these elements into the Project Approval Requirements and Team blocks.

Under HERMES: the execution order

HERMES, the Swiss project management method published by the Confederation, calls the charter's equivalent the execution order. It defines it as a "binding agreement between the project sponsor and the project manager", the framework for solution development and project closure. The project manager draws it up in the initiation phase from outcomes that include the study, the project management plan, the legal basis analysis, the protection needs analysis and the stakeholder list. The sponsor signs it when deciding the execution release.

Before the execution order, the project initiation order releases the initiation phase alone and plays the role of a phase charter.

The execution order contains the legal basis, which a public project cannot leave out, as well as the choice of scenario and approach. It has no heading for exit criteria. The sponsor can still stop a HERMES project: they refuse the execution release and end the project, or they discontinue it while it runs, through the task Decide on project discontinuation. The order does not set the condition for that stop in advance. In a HERMES project, writing that condition into the order closes the gap.

Pitfalls

The first pitfall is the charter copied from the business case. It repeats the analysis of alternatives and the financial calculation over several pages, then stops short of the elements that authorise. One reading shows the symptom: no authority level, no exit criteria. The charter refers to the business case for the reasoning and spends its lines on what the business case does not say.

The second pitfall is the objective without a criterion. Nobody can verify "modernise the counter". Table 4-1 counts measurable objectives, with their success criteria, among the elements of the charter. The test: at the objective's deadline, can someone who did not write the charter tell whether it has been met?

The third pitfall is the charter that plans. Detailed work breakdown, acceptance criteria per deliverable, a week-by-week schedule: every change then requires the sponsor's signature. The charter is out of date within a few weeks, and the team stops reading it. The detail belongs in the scope statement and the project management plan.

The fourth pitfall is the signature without authority or after the fact. A head of department signs for a budget that the executive board holds, or the sponsor signs once the work is under way. In the first case, the first dispute between departments over people or money escalates to someone who signed nothing. In the second, the charter ratifies decisions already taken and no longer authorises anything.

The fifth pitfall is the charter signed then forgotten. The budget, the milestones and the boundaries change by email and in meetings. At closure, nobody knows which version to measure the project against, and the success criteria are renegotiated.

AI considerations

A language model saves time on the first version. From the business case and the benefits management plan, it distributes what those documents contain across the twelve elements: purpose, expected outcomes, constraints, amounts. It flags the elements left empty, those the business case could not fill: the project manager's authority, the approval requirements, the exit criteria. It also reviews an existing charter against the twelve elements and marks objectives that lack a measure, a target value or a deadline.

It produces other forms of the charter: the one-page canvas from the long document or a German or French version for a project in a bilingual canton. A signed charter commits the sponsor, so someone who knows the project reviews a translation before it is attached to the signed document.

The limits come from the nature of the document. The authority threshold, the committed budget and the stop condition are the sponsor's decisions. A model proposes a threshold it has no reason to choose, and the plausible text it produces makes what nobody decided look decided. The inputs set the second limit: a business case contains amounts, sometimes names, and a public administration restricts the AI tools it allows. The documents go only to a tool the organisation has approved.

Examples

The example continues the case of the Vaud municipality from the business case fiche. Its municipal council has voted to join the shared service of the association of municipalities and to fund its go-live. The last column gives the origin of each row.

The stop criterion carries the decision that the business case could not take. The upgrade with the current vendor gives up online notifications, and the business case gives it only a duration, six months for the data migration. To finish before maintenance ends in month 16, the municipal executive decides by month 8 at the latest: 16 minus six months of work and two months for the vote. Milestone M6 leaves it two months of margin.

Visualisations

One figure places the charter at the output of the initiation process, with the sponsor's signature and the appointment of the project manager. The twelve elements, the three neighbouring documents, the mapping to HERMES and the completed charter are tables. The project canvas is a spatial layout, so it is drawn.

Cost

Tooling

The organisation's document template sets the headings. HERMES publishes its own for the execution order, downloadable from the outcome page. A template that contains the twelve elements keeps a charter from leaving out the exit criteria.

A whiteboard, physical or shared (Miro, Mural), holds the project canvas during the session that fills it in. The photograph or export of the board becomes the first version of the charter.

A qualified electronic signature shortens the signing round when the sponsor and the heads of department do not sit in the same place.

A versioned document repository (SharePoint, Confluence, an electronic document management system) keeps each signed version and shows which one is authoritative. A portfolio management tool, where the organisation has one, receives the charter as a request record and logs the decision to start.

Sources

• A Guide to the Project Management Body of Knowledge (PMBOK Guide), 8th edition, Project Management Institute: §2.1.6.1 Initiate Project or Phase, for the definition of authorisation, its inputs, tools and outputs (Figure 2-3), who drafts the charter and the seven questions of the adaptive charter; §2.5.1 Key Concepts, Stakeholders performance domain, for the sponsor's approval of the charter and of its changes; Section 4 Inputs and Outputs, entries "Project charter", "Project scope statement" and Table 4-1, "Assumption log", "Business case", "Business documents" and "Team charter"; Section 5 Tools and Techniques, entry "Project canvas" and Figure 5-15.
• Swiss Confederation, Federal Chancellery, HERMES 2022, Project management: outcome Execution order, for the definition and the headings; task Draw up project execution order, for the prerequisites; task Decide on execution release, for the sponsor's signature and the refusal to release; task Decide on project discontinuation, for discontinuation midway; outcome Project initiation order, for the release of the initiation phase alone.