The final section of the project charter template contains a table for the names, positions, and signatures of the individuals who must approve the charter. The charter serves as the tool that authorizes the project manager to begin applying organizational resources to the project activities (PMI 2004). Given this degree of importance, it’s only reasonable that the project sponsor (as a representative of senior management) and other key stakeholders formally approve the charter.
Following peer review by appropriate stakeholders (preferably using one of the techniques defined in your organization’s peer review process), these potential signatories meet to reach final agreement on the charter. It’s a good idea to include language on your charter template to make sure all approving stakeholders have the same understanding of what their approval means. For example, signing the charter could mean the signatory agrees with the content as presented here, agrees to use the charter as a basis for the project, and agrees to keep the information in the charter current and relevant.
When evaluating a proposed project charter, the stakeholders could arrive at one of the following possible conclusions, which can be recorded on the charter itself (see the template):
Approve the charter and authorize the project manager to develop a more detailed project plan (suitable for large projects).
Approve the charter and authorize the project manager to proceed with project execution (suitable for smaller or better defined projects).
Provide feedback and a request to revise the charter before reevaluating it.
Approve the charter, but place the project on hold until certain conditions are met.
Reject the proposed project.
Rejecting the project might appear to be a bad chartering outcome. However, making a no-go decision at this early stage prevents the organization from wasting resources on a project that shouldn’t proceed because of excess risk, insufficient business benefits, or other factors. It can be very difficult to terminate an ill-advised project once it’s underway. I know of one project that was canceled after spending $50 million, another one that $100 million failed to bring to fruition, and a third that poured several hundred million dollars down the drain with no useful deliverable. Although it’s hard to pull the plug on a project with a weak business case, failing to do so amounts to throwing good money after bad. A careful consideration of a proposed project charter might help your organization avoid this kind of waste.