TL;DR: Most articles on project charters hand you a component checklist and stop there. This one connects each charter element to the specific failure it prevents — scope creep, budget drift, stakeholder misalignment — so IT company owners understand not just what to include, but what goes wrong when it's missing. You'll finish with a complete picture of what a charter of project actually does.
What is a project charter in project management?
A project charter is the formal document that authorizes a project to exist, names the project manager, and defines the boundaries within which the team operates. It is not a plan. It is a mandate.
Most teams treat the charter of project as a formality they fill out before the real work starts. That framing is the problem. Without a signed charter, scope decisions get made in Slack threads, budget authority is assumed rather than granted, and stakeholders discover late that they had different definitions of "done." The execution-layer failures that follow a weak charter are predictable, not random.
The project charter purpose is authorization first, alignment second. It answers three questions before work begins: who approved this, what is in scope, and who has the authority to change either. Everything else in the document, including objectives, constraints, and stakeholder roles, serves those three answers.
Understanding what a project charter is and why it exists as an authorization document, rather than a planning template, changes how you write one. The next section breaks down the three functions a charter performs and names the specific disputes that surface when any one of them is missing.
What is the purpose of a project charter?
A charter of project does three things that no kickoff meeting or project brief can replicate: it authorizes the work, sets the boundaries, and aligns stakeholders before disagreements have a chance to form.
Authorization means a named sponsor has formally committed resources and accountability. Without it, a project manager has influence but no standing to make binding decisions.
Boundary-setting defines what the project includes and, just as importantly, what it does not. Teams that skip this step spend weeks arguing about whether a feature was "always in scope." According to PMI's Pulse of the Profession research, scope creep is among the top drivers of project failure — and most of it starts before the first sprint, not during it.
Stakeholder alignment locks in who owns what before work begins. The disputes that surface without a charter are predictable: conflicting success metrics between IT and the business unit, budget assumptions that were never written down, and delivery timelines that two departments understood differently.
Understanding what is the purpose of a project charter matters because these three functions are inseparable. A charter that handles authorization but skips boundary-setting still leaves your team exposed. All three project charter elements need to be present for the document to do its job.
What is included in a project charter?
A project charter bundles nine decisions into one document. Skip any of them and you'll spend the back half of the project relitigating what should have been settled on day one.
Here are the core elements, what each one does, and what breaks without it.
Project purpose and objectives: One or two sentences explaining why the project exists and what success looks like. Without this, teams optimize for different outcomes and only discover the conflict at review time.
Scope statement: A clear boundary around what the project includes and, just as importantly, what it excludes. This is the single most effective tool against scope creep, which affects the majority of IT projects and is almost always traceable to a scope boundary that was never written down.
Stakeholder list and roles: Names, titles, and decision rights for everyone with authority over the project. Without it, approvals stall because nobody knows who can say yes.
Project sponsor and authorization: The name of the executive or owner granting the project manager authority to assign resources. This is the element that makes the charter a formal authorization document rather than a planning note. If you want to understand why that authorization function matters, it comes down to preventing resource disputes before they start.
High-level timeline and milestones: Not a full Gantt chart, but enough to show the major phases and target dates. Teams that skip this end up with a launch date that surprises half the people responsible for hitting it.
Budget and resource allocation: A top-line number and a list of the people, tools, or systems committed to the project. Without a budget figure in the charter, finance and delivery teams routinely operate on different assumptions for months.
Assumptions and constraints: The conditions the plan depends on (a vendor delivers on time, a system stays available) and the limits the team must work within (headcount cap, regulatory deadline). Documenting these forces the team to surface risks before work starts rather than after something breaks.
Success criteria and acceptance conditions: Specific, measurable definitions of done. "The migration is complete" is not a success criterion. "All client records migrated with zero data loss, verified by QA sign-off by March 31" is. Vague criteria cause the most friction at project close, when sponsors and delivery teams disagree on whether the work is actually finished.
Escalation and decision path: Who resolves a blocked decision, and in what timeframe. A 48-hour escalation rule, written into the charter, prevents the week-long email chains that stall delivery.
These nine elements are what a project charter template should scaffold, not just list. Once they're defined and signed off, they become the reference point for every scope question, budget conversation, and priority call that follows. The next section covers how to prioritize projects once the charter is approved and work is underway.
How to create a project charter: a step-by-step process
Creating a charter of project starts before you open a template. The structure only holds if the inputs are right.
Gather stakeholder input: Interview the project sponsor, department heads, and any technical leads before writing a single line. In an IT context, this means aligning on system dependencies, compliance requirements, and resource constraints upfront. Skipping this step is where scope creep starts.
Define scope and objectives: Write the project objective in one sentence, then list what is explicitly out of scope. Vague scope boundaries are the most common reason IT projects miss deadlines. If you need a refresher on what a project charter is and why it exists, that context helps here.
Identify risks and constraints: List the top three to five risks with a one-line mitigation for each. Constraints include budget ceilings, fixed deadlines, and team availability.
Assign roles and authority: Name the project sponsor, project manager, and key stakeholders. Confirm who has sign-off authority. Ambiguity here produces the execution-layer failures that follow a weak charter.
Draft using a project charter template: Pull your standard project charter elements into a single document: objectives, scope, timeline, budget, risks, and RACI. Keep it to two pages. A longer document rarely gets read.
Route for approval and sign-off: Send the draft to the sponsor first, then circulate to stakeholders for review. Once signed, where charter inputs become live project structure is your next move.
Can a project charter be used for agile projects?
Yes, a charter of project works in agile environments — it just looks different.
In a waterfall project, the charter locks scope, timeline, and deliverables upfront. An agile charter defines the why and the who with precision, but leaves the what deliberately flexible. Scope is framed as outcomes, not feature lists.
For an IT team running two-week sprints, a practical agile charter includes:
A fixed goal ("reduce API response time below 200ms by Q3")
Named product owner and sponsor with clear decision rights
Budget envelope and team capacity, not a task-by-task breakdown
Approval cadence tied to sprint reviews, not a single sign-off gate
That last point matters most. Waterfall charters get signed once. Agile charters get revalidated at each sprint boundary, which keeps the sponsor aligned without freezing the backlog.
The core elements — purpose, stakeholders, constraints, success criteria — stay the same across both approaches. What changes is the specificity of scope and when decisions get made.
If you're building the execution layer after charter approval, where charter inputs become live project structure shows how that handoff works in practice.
Common mistakes that make a project charter useless
Four failures show up repeatedly when a charter of project review goes wrong.
Vague scope is the most common. Phrases like "improve system performance" with no baseline or target give every stakeholder room to invent their own definition. That ambiguity is where execution-layer failures begin.
Missing sponsor sign-off means the charter exists as a document, not a commitment. Without a named sponsor's signature, budget and priority decisions stall the moment conflict appears.
No success criteria leaves the team unable to call the project done. "Done" becomes political, not factual.
No change control reference is the quietest failure. When scope shifts mid-project and the charter has no process for approving changes, every adjustment becomes an informal negotiation.
Run these four checks against any existing charter before asking what is included in a project charter at a deeper level. All four are standard project charter elements, and all four are fixable in under an hour.
From charter to execution: where the document meets the work
A charter of project is only useful if someone actually builds from it. Once the sponsor signs off, each charter input needs a direct home in your execution layer: scope becomes the task breakdown, the budget becomes a tracked cost line, the timeline becomes milestone dates, and the named owner becomes the assigned lead with real accountability.
Most teams skip this translation step, which is where execution-layer failures begin. A project charter template that lives in a shared doc but never maps to live work is just a sign-off artifact.
Where charter inputs become live project structure is the moment the document earns its project charter purpose. Taro lets you wire scope, owner, and timeline directly into task-level execution, so nothing gets reinterpreted between planning and delivery.
Closing
A project charter only prevents failure if the boundaries it sets carry forward into how the work is actually tracked. The nine elements—scope, budget, sponsor, stakeholder roles, timeline, success criteria, constraints, assumptions, and escalation path—matter only if they stay visible and binding through execution. That's where most teams lose the charter's value: it gets signed, filed, and forgotten.
The charter defines the inputs that should structure every decision your team makes. If those inputs aren't wired into how you track ownership, prioritize work, and manage scope through the project lifecycle, the charter becomes a compliance artifact instead of a working boundary. Start here: after you sign your charter, ask yourself whether your project management tool is built around the same five elements the charter locked in—scope, budget, priority, owner, and approval sign-off. If it's not, the charter's authority won't survive first contact with the work.
FAQ
What is included in a project charter?
Nine core elements: project purpose, scope statement, stakeholder list, project sponsor, timeline and milestones, budget and resources, assumptions and constraints, success criteria, and escalation path. Each one prevents a specific failure—scope creep, budget drift, approval delays, or misaligned success metrics.
What is the purpose of a project charter in project management?
A charter authorizes the project, sets boundaries around what is in and out of scope, and aligns stakeholders before disagreements form. It is a formal mandate, not a planning document, and answers three questions: who approved this, what is in scope, and who has authority to change either.
How do I create a project charter template?
Interview stakeholders first to surface dependencies and constraints, then define scope and objectives in one sentence, identify top risks and constraints, assign roles and authority, set a high-level timeline with milestones, confirm budget and resources, document assumptions, write specific success criteria, and define escalation paths before circulating for sponsor sign-off.
Can a project charter be used for agile projects?
Yes. Agile projects still need authorization, scope boundaries, and stakeholder alignment. The charter is shorter and less prescriptive than in waterfall, but the nine elements remain: scope, sponsor, stakeholders, budget, timeline (release gates, not task dates), success criteria, constraints, assumptions, and escalation rules.
Get tactical playbooks every Tueday
One email. 5-min read. Tactical reads for B2B operators who actually run the business.
Join 48,000+ B2B operators · Unsubscribe anytime
Lauren Brooks is a Project Delivery Lead & Business Operations expert who has managed complex, multi-team projects across agencies, SaaS companies, and service firms. She writes about what separates projects that deliver on time from those that spiral; and how smart systems make the difference before problems even appear.