Project Charter and Business Case
1
Document
The charter that authorizes the project
Sponsor
Signs It
The sponsor, not the PM, signs the charter
4
Financials
NPV, IRR, Payback, BCR in the business case
the document that makes the project real
Anatomy of a Charter
PROJECT CHARTER
v1.0 · FY26-Q2
Checkout Redesign Initiative
purpose · why this project exists
Reduce cart abandonment from 68% to 45% by simplifying the three-step checkout.
budget
$850,000
target launch
Aug 15, 2026
high-level objectives
- › Reduce friction from 3 steps to 1
- › Pass WCAG 2.1 AA accessibility
- › Support 4 payment providers
assigned PM · authorized to spend
Amelia Chen
key risks · high-level
Payment provider API stability · Legal review for new T&Cs · Holiday freeze window
sponsor authorization
M. Rodriguez
Marco Rodriguez · VP Product
Apr 14, 2026
APPROVED
how to read this
- › The charter is a one-page document (ish). Not a detailed plan — that comes later.
- › It answers four questions: why (purpose), what (high-level objectives), who (PM + stakeholders), and how much (budget, deadline).
- › The sponsor signs it, not the PM. That signature is the PM's permission to spend money and commit resources.
- › Without a signed charter, the project officially does not exist. Any work before that point is at-risk.
Exam Traps
The PM does not write or sign the charter
The sponsor authorizes the project by signing the charter. The PM is named in the charter but does not author it.
Charter defines authority, not details
The charter gives the PM authority to spend resources. Detailed planning happens after the charter, in the project management plan.
Business case comes first
The business case justifies the project. The charter authorizes it. Business case is input, charter is output of initiating.
Assumptions and constraints belong in the charter
High-level assumptions, constraints, and risks are documented in the charter. The exam tests what is and is not in the charter.
Charter unlocks work
No charter, no project. The sponsor's signature is your permission to act.
Business case ≠ charter
Business case justifies. Charter authorizes. Two separate documents.
You write up why the kitchen needs remodeling — home value, family needs, broken appliances. Numbers attached. This goes to the decision-maker.
Your spouse reviews the case, agrees it is worth doing, and signs off. That is the charter — formal authorization.
The charter names you as the person running the remodel. It gives you authority to hire contractors and spend within the budget.
The charter is a high-level permission slip. The detailed plan — schedule, vendors, color choices — comes after.
Ready to test your PMP knowledge?
1,800 practice questions written by certified professionals.
Start Practicing PMP