Back to Basics: How to Create a Project Charter

How to create a project charter.

About three years ago, I read a book called “Start with Why: How Great Leaders Inspire Everyone to Take Action” by Simon Sinek. In the book, the author discusses and describes how to start a new endeavor. He suggests that leaders should start with a ‘why’. They should explain the purpose of the endeavor before talking about ‘what’, ‘who’, and ‘how’. He argues that if the team understands the endeavor’s purpose, they will become highly focused and complete the endeavor successfully.

A project charter does just that. It documents the purpose of a new project and delineates the objectives of the project.

Let’s understand what a project charter is and how it is created.

What is a project charter?

As per the PMBOK Guide, a project charter is a document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to the project activities.

Now that we know why a project charter is created, we can address what a project charter is.

Although a project charter is a very small document, it is one of the most important documents in a project, if not the most important. Generally, it is one to two pages long. It describes essential elements of a new project that are known at the beginning.

Contents of a Project Charter

The style and content of a project charter may change with industry and organization, but a project charter typically contains all of the following:

1. Purpose of the project – What problem will the project solve, and what are the expected benefits? Is it going to create a new product and launch it in the market? Will it improve the quality of an existing product or service? Will it improve the efficiency of an existing process? Is it aimed at increasing the profitability of a business, or is it done for a social cause?

2. Small description – A brief overview of the project, including how it will solve the problem.

3. Project objectives – Specific and measurable goals that the project needs to achieve. These goals should be realistic and aligned with the project’s purpose.

4. Main deliverables – Deliverables are outputs that customers and other stakeholders require as part of the project.

5. High-level scope and requirements – what are the project’s boundaries, and what work will be done to meet the project objectives?

6. High-level schedule – A high-level schedule contains major milestones and a timeline for major deliverables.

7. Overall budget – Money required for all types of resources required to complete the project, which includes people, facilities, equipment, and materials.

8. Initial risks – A list of all the risks that are known at the time of beginning a project. A risk is an uncertain event or condition that may impact the project.

9. Key stakeholders and their respective roles – Stakeholders are those people who are either interested in or impacted by the project. Some of them are decision-makers and can influence the direction of the project. They include sponsors, customers, team members, and other relevant parties.

10. Project manager’s name.

11. Project sponsor’s name and signature.

The project charter informs the stakeholders about the project’s existence and builds a foundation for the project team. Its purpose is to bind the team together and secure commitments from various stakeholders.

The project charter is signed and authorized by the project sponsor. It has no significance without the sponsor’s signature.

How to Create a Project Charter

A project charter is a short document and can be created in any text editor like MS Word. Or, it can be created as a slide show in PowerPoint.

The project sponsor is primarily responsible for creating a project charter, but she can delegate the responsibility to the project manager.

A project charter gives the project manager authority to use the organizational resources to complete the project.

You can start creating a project charter after you have thoroughly understood the finer elements of the project and defined its objectives. Here are a few steps to help you create the project charter.

1. Use your organization’s project charter template. If your organization does not have a template, you should create one containing the main project charter components described in the previous section.

2. Have a discussion with the senior stakeholders and core team members. You can gather project information by discussing it with key stakeholders such as customer representatives, sponsors, Project Management Office (PMO) members, and the quality manager. You should seek information required for filling up your project charter template and take notes while discussing.

3. Start filling out the project charter template from your notes.

4. After creating the initial version of the project charter, run it by key stakeholders and core project team members. Ask them to review it for correctness and completeness.

5. Seek approval from the project sponsor. After the charter is created, it has to be authorized and signed by the project sponsor and issued to the project manager.

6. Call a project kickoff meeting of key stakeholders to explain the content of the approved project charter. The purpose of this meeting is not only to share the approved charter with the key stakeholders but also to secure their commitments.

Best Practices for the Creation of a Project Charter

1. The project charter should be simple, short, and unambiguous. It should be clear, concise, straightforward, and well-organized, leaving no room for any interpretations.

2. It should provide a high-level overview of the project and not drill down into details. The project charter should be succinct and concise, as the project’s finer details will change with time.

3. Project managers should create a consensus with the stakeholders and seek their approval while creating and presenting the project charter. It will serve no purpose if the stakeholders are not aligned with it.

Over to You

In your opinion, what is the purpose of a project charter?

How do you create project charters for your projects? Does your organization maintain a project charter template?

I would love to hear from you in the comments section below.

Related Content

Back to Basics: How to Start a Project

Project Initiation: How to Start Your Project on the Right Foot


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Written by Praveen Malik
Praveen Malik, PMP, has two-plus decades of experience as a project management instructor and consultant. He regularly conducts project management workshops in India and abroad and shares his project management thinking in his blog, PM by PM.
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  1. Nice!

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