Project Charter

A project charter is a formal document issued after the statement of work is signed and before kickoff that authorises the project, names the sponsor, summarises objectives and scope, and gives the project manager authority to mobilise resources.

The charter does not replace the SOW. It translates the commercial agreement into an internal operating authority, making it the foundational governance document for the delivery team.

What a project charter contains

A well-formed charter captures the information the delivery team needs to act without returning to the contract for every decision:

• Project purpose and objectives. A brief statement of what the engagement is meant to achieve and what measurable outcomes constitute success.
• Scope summary. The key deliverables in scope, cross-referenced against the scope section of the SOW, and a short list of explicit exclusions.
• Sponsor and stakeholder identification. The named client executive who holds decision authority, along with any secondary stakeholders who must be consulted or informed. This links directly to the RACI structure built at kickoff.
• Project manager authority. The charter formally grants the project manager permission to assign staff, commit budget, and approve decisions within defined thresholds. Without this, the PM is in an ambiguous position when making resourcing calls.
• High-level timeline and milestones. Key dates and milestones are recorded so the team has a shared baseline from day one. The project plan expands these into a full schedule.
• Budget reference. The approved budget from the SOW, stated here as a ceiling the PM can track against.
• Assumptions and constraints. Material assumptions that, if they prove false, would require a change order. Recording them at charter stage prevents later disputes over who assumed what.

How it differs from the SOW

The SOW is a commercial document between two parties. It defines what the firm will deliver, on what terms, and for what fee. The project charter is an internal governance document. Its audience is the delivery team and the client sponsor, not the legal or finance function. It converts the SOW’s commercial language into operational instructions.

In practice, a charter may reference the SOW by clause but will not reproduce its contractual terms. The charter is shorter, more direct, and focused on enabling the team to move rather than on protecting the firm’s contractual position.

When it is issued and who owns it

The charter is issued after contract execution and before the kickoff meeting. The engagement manager or delivery lead typically authors it, with the client sponsor co-signing or at minimum acknowledging it. Issuing the charter at kickoff, rather than before it, is a common mistake: the team then enters the kickoff without a shared authority document, and the first meeting is spent establishing what the charter should have settled.

The engagement manager owns the charter for the life of the project. If scope or sponsorship changes, the charter is updated to reflect the new state. Keeping it current means the team always has a single source of truth for who can authorise what.

Relationship to project governance

The charter is the entry point into a project’s governance structure. It establishes the steering committee members by name, sets the cadence of formal reviews, and defines the escalation path for issues that exceed the PM’s authority. Without a charter, governance tends to be informal and reactive. With one, each party knows from day one where decisions are made and who makes them.