What Is a Charter Document?

When starting a new organization, building a team or defining a project, it’s important to know what the purpose and scope are intended to be. The document used for clarifying this is called a charter document.

A charter is a formal document that is like a road map for what an organization, team or project is intended to be and accomplish. It includes who’s involved, what the goals are, who has the authority and over what and whom and if there is a life cycle to the group or project when it is complete.

Charter documents have existed since the Middle Ages. The Magna Carta, which dates back to 1215, clarified the role of the King of England while establishing rights for the barons, other property owners and the Church.

Throughout history, charters have been valued documents delineating organizational and project rights, as well as what needed to be accomplished. From chartered companies endowed with royal powers as they set forth to discover the new world through to documents dictating colonial rights, the charters of yesterday are similar in framework to today's organizational documents.

A project charter doesn’t just define the ambitions and players in a project; it protects the team from dreaded “scope creep” that sees many projects becoming unruly.

A charter is drawn up before the project plan; it details the objectives and goals of the project. It also includes the project background, explaining its purpose and what it needs to accomplish. The charter outlines the scope of the project and states what the deliverables are, tasks the team is responsible for and jobs the team is not expected to perform as well. The latter is crucial in preventing “scope creep” that can lead to ever-expanding responsibilities, which can ultimately threaten deadlines.

The charter should also dictate leadership, stakeholders and team members. It will outline critical dates in the project and the budget, along with risks and assumptions, as well as dependencies and constraints. It must clarify the authority level of the project manager, including whether they’re able to hire or fire staff. Finally, it should establish a communication game plan, including parameters on how quickly responses are expected on queries.

A project charter is intended to be signed off on by principle stakeholders and management. It should reduce miscommunication and provide a strong guiding light to the life of the project. It's also considered a way to 'sell' a project to management for approval.

Much like a project charter, a team charter should accomplish the same things for any team. Its components are similar but applied to the team rather than a project.

It will explain why the team is being created and what kinds of projects it will spearhead while outlining the objectives for the team’s future and clarifying parameters for measuring the team’s success.

The charter will clearly state roles – who’s in charge, what their authority entails, who the team members are, what skills they all bring to the table and how those skills will best be used. The document will explore the budget allocated to the team as well as the resources at their disposal. Also, it establishes how internal audits and reviews will be undertaken as to progress on the team’s projects, along with the execution of team evaluations and the frequency thereof. Communication methods and expectations should also be outlined.

A good team charter should help keep miscommunication to a minimum and keep a team focused on its objectives.

The charter document clarifies power structures, establishes communication plans and serves as a rough guide on budgets and allocations. All this might be perceived as hamstringing matters before they even get started. But the charter helps protect projects and teams by setting out guidelines and clear aspirations as well as limitations on expectations and roles. A well-written charter document will provide and protect the scope for teams, projects and organizations.