A Portfolio Charter is a formal document issued by a sponsor that authorizes the existence of a portfolio, defines its structure, and links it to the organization’s strategic objectives. It serves as the foundation for portfolio governance, providing clarity on scope, authority, and alignment.
The charter enables decision-making, resource allocation, and oversight by establishing accountability and intent at the portfolio level.
Key Characteristics
- Authorization Document – Formally initiates and legitimizes the portfolio
- Strategic Linkage – Connects portfolio components to enterprise goals
- Structural Definition – Outlines governance roles, composition, and boundaries
- Governance Tool – Provides the basis for managing and evaluating portfolio performance
Example Scenarios
- A sponsor issues a portfolio charter for an innovation portfolio focused on digital product development
- A sustainability-focused portfolio is chartered to centralize green initiatives and align with ESG goals
- A regional portfolio charter outlines responsibilities across international offices
Why Portfolio Charter Matters
- Establishes Authority – Empowers the portfolio manager and governance bodies
- Aligns with Strategy – Ensures portfolio efforts support long-term goals
- Improves Governance – Clarifies roles, boundaries, and decision rights
- Drives Execution – Enables strategic alignment through clear authorization
See also: Program Charter, Project Charter, Portfolio, Governance, Strategic Alignment.