Project Charter

Skill level: Basic


The purpose of a project charter is to define the focus, scope, direction, and motivation for a team. The project champion typically creates the preliminary charter with the team leader. The project team reviews the draft and provides input for the champion’s final approval.

  • Key components of a project charter include:
    1. Business case – financial impact, why important, why now
    2. Problem statement
    3. Project scope – what are the boundaries, or what is in scope and what is out of scope
    4. Goal statement or success measures
    5. Roles of team members
    6. Milestones and deliverables – what needs to be accomplished and delivered by when

The project charter can be, and often is, modified through the analyze phase of an improvement project.  After the analyze phase is complete, no further changes should occur.


  • Builds the vision and case for change
  • Provides a constant and consistent target for project team members
  • Clearly aligns team members
  • Indicates why a project has priority over other projects
  • Describes the gap between the current state and the desired state
  • Provides a reference point the team can continually refer back to in order to keep direction and scope

How to Use

  • Step 1.  Define the business case. Why is the project important, and why now?
  • Step 2.  Define the problem statement. Quantify the problem, its impact on the process, and how long it has existed without causation.
  • Step 3.  Define the project scope. What are the boundaries of the project team, what is in scope, and (sometimes even more important) what is out of scope?
  • Step 4.  Define the goal(s) of the project team. What are the tangible performance improvements that the team has as a target?
  • Step 5.  Define the resources and the roles that each will play.
  • Step 6.  Define the milestones and deliverables. What needs to be accomplished and delivered by when?
  • Step 7.  Review the project charter with the entire team to solicit input. If potential changes are identified, review with the champion to gain approval before publication.

Relevant Definitions

Not Applicable


The example below is related to the Chapter 7 bankruptcy process of a financial institution.

The goal of the improvement project is to increase the reaffirmation rate and reduce expenses related to Motion For Reliefs. Establishing work standards and appropriate documentation is also critical. These improvements are an integral part of earning a Special Servicer rating from various agencies so that the company can grow its asset portfolio.


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