project charter

A project has many documents that are developed by the project manager with the help of the project management team. However, there is one document where the project manager does not have a role in creating; that is the project charter

This is the most important document for any project. It establishes the project and provides guidelines to stakeholders. Any change to this document can have a huge impact on the project. Therefore, changes to this document are rare and require top-level approval.

This document is important from a PMP exam point of view. You will see a few questions on this topic. Understand it well. 

What is the Project Charter?

A project may unofficially start when the sponsor gets an idea about it. Afterward, they will conduct a cost-benefit analysis to see if it is profitable. If the project aligns with their business objectives, they will pursue it.

Then they will create a project charter to launch the project. This authorizes the existence of the project. It appoints a project manager and dictates when it will begin. 

Many organizations call this the “Project Definition Document.” It gives the project manager the authority to direct and complete the project.

A minimalist project charter includes the following information:

  • The appointed project manager
  • A definition of the project scope
  • The budget
  • The defined milestones
  • A list of the important stakeholders
  • The technical characteristics of the deliverable

According to PMI, a project charter is an official document that authorizes a project or a phase.  It records the requirements that will satisfy the stakeholders’ needs and expectations.

The project starts the moment the sponsor signs the charter. No project charter means no project or project manager.

Characteristics of the Project Charter

The following are a few characteristics of a project charter:

  • It recognizes the project and appoints a project manager.
  • It gives the project manager the authority to lead the project.
  • It defines the project’s objectives.
  • It lists important stakeholders.
  • It is only one or two pages of document.
  • It lists important assumptions and constraints.

Many professionals think that the project manager can approve the project. Others wonder why the project manager is involved in developing the project charter but cannot approve it.

Please note that management needs the project manager’s help, as they are the expert. However, it must be approved by someone external to the project, who has the authority to do so.

The project charter is an important document in all organizations. However, its benefits are visible in matrix organizations. The project manager may not have control over the organization’s resources; the project charter gives the project manager authority.

Contents of the Project Charter

A project charter may contain the following information:

  • Project title and description
  • Project purpose or justification
  • Measurable project objectives
  • A description of the deliverable
  • The assignation of the project manager and setting their authority level
  • High-level assumptions and constraints
  • Pre-assigned resources
  • The names of the main stakeholders
  • Expectations
  • High-level project and product requirements
  • Acceptance criteria
  • A summary of important milestones
  • The estimated budget
  • High-level risks
  • The name of the sponsor
  • The project’s approval criteria
  • Expected benefits of the project

A project charter builds a solid foundation for your project. It gives a common understanding of the objectives.

A Few Benefits of a Project Charter

The following are a few benefits of a project charter:

  • It gives the project manager the authority to complete the project
  • It explains the project’s existence
  • It shows management’s support for the project
  • It defines the outcome
  • It aligns the project with the organization’s objectives
  • It gives team members a transparent reporting system
  • It saves you from scope creep and gold plating
  • It helps you avoid disputes

Questions about the Project Charter 

Now, let’s discuss some FAQs about the project charter.

Who signs the project charter?

PMP aspirants often get confused and think that the project manager signs the project charter. 

Please note that the project charter appoints a project manager. Obviously, a person cannot appoint themselves.

The sponsor, or someone from top management, signs the project charter. They are external stakeholders and have the authority to provide resources and support.

Can a project have multiple project charters?

Most projects have one project charter. However, big, multi-phased projects can have many charters, one for each phase.

Project Charter vs Memorandum of Agreement

Many aspirants often get confuse the Memorandum of Agreement and the project charter. 

The Memorandum of Agreement (MOA) is an agreement between the two parties. When a contractor gets a contract from a client, they both sign a Memorandum of Agreement.

This is a business and legally binding document, you can only change it when both parties agree to do so. This document is one or two pages long.

On the other hand, a project charter is signed by the contractor. Here they assign a project manager. This is not a legally binding document and the contractor can amend it as long as it abides by the terms and conditions.

Conclusion

A project charter is a key to your project’s success. It provides stakeholders with a common understanding of the project. It is an agreement between the key stakeholders and it communicates the project manager’s authority. It is a core of the project the binding element that provides direction.

Have you ever taken part in developing a project charter? Please share your experience in the comments section.

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Speak Your Mind

  • Hi Farhad,
    You have mentioned multiphase project can have many project charter. I am confused that I had come cross similar question .. any reference I’m PMBOK..
    Also @ Project Charter vs Memorandum of Agreement- you mentioned charter is signed by contractor but actually it is sponsor

    • Once you subcontract a part of your project to a contractor, they may assign a project manager to complete the task after signing a project charter.

  • What should be done if you join a project as PM midway in execution of project and the project charter is not present . Should PM terminate the project or should the PM create charter although its midway .

    • How you can be a project manager without a project charter. Please ask your management to approve a project charter so you can start your work.

      Projects are not executed in isolation. To appoint a project manager, many approvals are required, and a project charter is a must.

      In a small informal organization with very few team members, this can occur. Does not happen otherwise.

  • Hi,
    What if the project manager changes all of a sudden during the project at any phase. Does the Project charter also change with it?

  • Q1 -Is project charter mandatory for a project?
    If no, then which document is used for formal authorization to start a project?

    Q2- Is project kick off meeting is done before the project charter is signed?
    If no, then how can we include the stakeholders in the Project Charter because the stakeholders are identified in the kick off meeting according to me?

  • who is the sponsor which I have t mentioned in project charter we are the client and the project for government, is the sponsor our sponsor in the company or the sponsor from the government

  • Hi Fahad…. Brilliant stuff mate, thank you for your commitment to this blog!
    If it weren’t for people like you, a lot of us would struggle that much more.
    I’ve only just started a national diploma so a long way to go so hoping this blog will continue strong!
    Kind regards
    Dale Holdstock

  • Dear Fahad
    I love reading your blogs, I am studying project management at BCIT and you simplify each category of the project management processes and I thank you for it. I was wondering if you have blogs on Quality, Scheduling and Risk?

    kind regards
    Caroline

    • He should make himself available. It is like saying that some one is sick and he is not available to visit doctor and take medicines then who else can take in place of him.

  • Dear Mr. Fahad,

    Thanks for excellent articles.

    From January 12, 2016, 25% of the new exam focusing on new topic areas which were not previously tested like Benefits Realization, Value of Lessons Learned,Project Charter (Project manager responsibilities related to the project charter have changed. The sponsor or customer now creates and approves the charter, and the project manager contributes to its development, and informs others about the charter.
    Project managers are no longer solely responsible for creating the project charter.), Stakeholder Relationships etc. Can you please refer to some suitable and credible articles related to detail of 25 % changes as exam contents changed but study resource almost same.

    Need your support

    • Project managers were never solely responsible for creating the project charter.

      I believe content from all reputed resources are already updated. It is difficult for me to pin point any single source.

  • Dear Mr. Fahad,

    Can you please check guide correct answer with reason.

    source:-preparepm.com

    Typically signing of project charter is the responsibility of
    Project Sponsor
    Senior Management
    Project Manager
    Project stake-holders

    As per me , Answer should be A but correct Answer is B
    Senior Management is responsible for issuing the charter.

    • As per my understanding, “project sponsor” is the correct answer.

      Please do not paste content from other site to anywhere unless you have the permission. Try to provide link and ask the question.

  • I am very confused about Question #4 on this page:
    https://www.simplilearn.com/project-scope-management-importance-rar89-article

    “Who creates the project charter?” I think it is very clear from literature that the project charter is signed by the sponsor or senior management…someone who can authorize the project, and authorize the project manager to start working.

    But my understanding is that sometimes the project charter is “created” (or “drafted” or “written”) by the sponsor, and sometimes it is drafted by the project manager himself / herself, who then submits it for approval to the sponsor.

    And thoughts on this? This Question #4 says the project charter is “created” by the sponsor, but I think many times the sponsor itself does not sit around writing this document but actually reviews and signs…that is, the project sponsor is not the primary “creator” as it were.

  • Hi,
    Who would be most likely to authorize a Project?
    1-Project Manager?
    2- Executive outside of the project?
    3. Project Manager’s Supervisor?

    Thanks

  • If the project is comprised of multiple” finish to start activities ” each with a set of unique deliverables. In other words there is interdependency between the activities.
    In such a case do i need to compile individual project charters ?

    • Most of the times you have only one project charter per project but if the project is very big and complex, you can have it many. It is not dependent of deliverables, a small project can also have many deliverables.

  • Hello Fahad can you publish a blog on the kick off meeting contents? I noticed several exam questions focus on kickoff meeting which occurs prior to planning. Thank you.

  • How Authorizes Changes?
    1- changes to the project charter?
    2- changes to the performance baseline?
    3- changes to the high level constraints?
    4- changes to the project plan?

  • Hello Sir,
    Who will authorize the project charter or who will issue the project charter?
    a.) Project Sponsor b) Senior Management.
    I thought Answer is Project Sponsor. But in internet, it says Senior Management. Which one is right?

    • The sponsor has given contract to your company to complete the project. Now it is your company’s responsibility to complete the project and appoint the project manager. Most of the time, it has nothing to do with the sponsor.

  • Hi Fahad,
    i would like to ask if i have a project with multi-phases?
    do i have to check the project charter in each phase or i can start with identify stakeholders in next phases direct ??

    thanks,
    imad

    • There will be one project charter for any project and you can refer it any time you want. Regarding the stakeholders identification, this process is usually performed before you start project planning.

  • project charter sign off is done by project leader in our automotive organisation.We are proposing to add
    Product Developement and marketing head in the signature column. is it correct as per the process?

    • It can be signed by more than one person.

      Key point is that, they must be external to the project and have authority to do so.

    • First Paragraph, Page 74, the PMBOK Guide 4th Edition says…

      "Projects are authorized by someone external to the project such as a sponsor, PMO, or portfolio steering committee."

      Now, my understanding is that, if there is more than one sponsor, in this case they should form a committee and chose a committee head. And then this committee will approve the project charter to authorize the project.

      This is what I understand, let me know if you have any different thoughts.

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