Terms of reference
Terms of reference (ToR), also known as a terms of reference document, is a formal written agreement that outlines the purpose, scope, objectives, structure, roles, responsibilities, and operational framework for a project, committee, evaluation, meeting, negotiation, or any similar collaborative endeavor involving a group of individuals or organizations.[1][2] In project management and governance contexts, a ToR serves as a foundational tool to establish clear expectations, ensure accountability, and align stakeholders on deliverables, timelines, and resources, thereby minimizing ambiguities and facilitating effective execution.[3][2] For instance, it defines the boundaries of the work, including what is included and excluded, to prevent scope creep and guide decision-making throughout the initiative.[4] Key components typically included in a ToR encompass the background and rationale of the endeavor, specific objectives and key questions, the scope of activities, proposed methodology or approach, governance structure and accountability measures, qualifications required for participants, deliverables with associated milestones and timelines, resource allocation such as budget, and any guiding principles like ethical standards or diversity considerations.[1][4] These elements are customized based on the context, such as in international development where organizations like the World Bank use ToRs to commission evaluations that assess program effectiveness and inform future policies.[4] The ToR functions as a contractual basis between commissioners (e.g., funding agencies or sponsoring bodies) and executors (e.g., consultants or teams), often spanning 5–10 pages and forming part of legal agreements to evaluate success against predefined criteria.[4] In governance settings, it emphasizes membership composition for balanced representation, leadership roles, communication protocols, conflict-of-interest declarations, and periodic reviews to adapt to evolving needs.[2] Its importance lies in promoting high-quality outcomes by providing a structured reference that supports transparency, efficiency, and stakeholder engagement across diverse applications, from public sector taskforces to non-profit committees.[5][1]Definition and Purpose
Core Definition
Terms of reference (ToR) is a formal document that outlines the purpose, scope, structure, and operating principles of a project, committee, task force, or inquiry, providing a clear framework for its activities and participants.[6] It articulates the objectives, boundaries, roles, responsibilities, timelines, and resources involved, ensuring alignment among stakeholders and guiding decision-making throughout the endeavor.[7] The term originates from British parliamentary practice in the 19th century, where it referred to the mandated scope and authority given to committees or select bodies for investigations and deliberations. In this context, terms of reference served as the official instructions defining the limits of a committee's inquiry, a usage that has evolved into broader applications in governance and management.[8] Key characteristics of terms of reference include clarity in defining expectations and processes, specificity in detailing deliverables and constraints, and mutability, as the document can be amended or revised with appropriate stakeholder approval to adapt to changing circumstances.[6] Unlike a project charter, which provides high-level authorization and initiation details such as business justification and sponsor approval, terms of reference emphasize operational boundaries, methodologies, and implementation guidelines.[9]Historical Origins
The concept of terms of reference originated in 19th-century British parliamentary procedures, where they were used to define the scope and remit of committees investigating specific matters. The earliest documented use appears in the Hansard records from a 1849 debate on the Bribery at Elections Bill, in which Members of Parliament referred to the "terms of reference" for a proposed committee to examine electoral practices, emphasizing the need for a broad scope to address existing decisions and precedents.[10] This usage reflected a growing need for clear boundaries in legislative inquiries during an era of expanding parliamentary oversight. In the 20th century, terms of reference evolved through adoption in international organizations, particularly for delineating mission scopes and committee mandates. The League of Nations, established in 1920, frequently employed the term in its early operations; for instance, in 1920 discussions on mixed commissions for naval and territorial issues, the terms of reference were formalized to guide advisory roles among Allied powers.[11] This practice continued into the 1940s with the United Nations, where the term appeared in foundational documents and resolutions to outline organizational responsibilities; the 1948 United Nations Charter implementation included terms of reference for mediators and committees, such as in General Assembly Resolution 186 appointing a UN Mediator in Palestine.[12] Post-World War II standardization further embedded terms of reference in project management frameworks, influencing government and international practices. In the United States, the 1950s marked a pivotal period for formal project management in defense and aerospace sectors, for initiatives like the Air Force's ballistic missile programs. In the United Kingdom, the 1970s saw the development of structured methodologies, with the PROMPT framework (introduced in 1975) adopting terms of reference to define project roles and deliverables, later evolving into the PRINCE method in 1989 for government IT projects.[13] Modern adaptations in the 2000s emphasized standardized and digital formats, facilitated by international norms. The ISO 21500 standard, published in 2012, formalized terms of reference within project charters, linking them to organizational objectives and recommending their use to clarify project initiation and stakeholder expectations.[14] This guidance promoted digital templates for broader accessibility, aligning with evolving project management tools across sectors.[15]Structural Elements
Objectives and Scope
Within terms of reference (ToR), objectives outline the specific, measurable goals that define the intended outcomes of a project, committee, or inquiry. These objectives are typically framed using the SMART criteria—Specific, Measurable, Achievable, Relevant, and Time-bound—to ensure clarity and feasibility. For instance, rather than a vague aim like "improve efficiency," a SMART objective might state: "Reduce operational costs by 15% through process optimization within the next 12 months, as measured by quarterly financial reports." This approach, rooted in goal-setting theory, helps align efforts with broader strategic priorities and provides a benchmark for evaluating success.[16][17] The scope of a ToR delineates the boundaries of the endeavor by specifying inclusions (what is covered) and exclusions (what is not), encompassing functional, geographic, temporal, and resource limits to maintain focus. Inclusions might detail core activities, such as analyzing data from a defined set of operations, while exclusions could explicitly rule out unrelated areas like international expansions or non-core personnel reviews. This structured definition ensures the work remains realistic given available constraints, avoiding overextension and facilitating resource allocation. For example, in an evaluation ToR, the scope might limit coverage to a specific timeframe and thematic issues, such as program effectiveness in targeted regions, while excluding broader policy reforms.[18][4] Objectives and scope are interlinked, with well-defined objectives guiding the scope to prevent mission creep—the gradual expansion of work beyond original intentions. By tying scope boundaries directly to objective-driven deliverables, ToR documents establish a baseline that requires formal approval for any changes, thereby controlling deviations and maintaining alignment. A practical illustration is a committee ToR where objectives focus solely on financial audits, explicitly excluding operational reviews to avert scope expansion into unrelated areas. This interrelation promotes efficiency and accountability throughout the initiative.[18][19]Roles, Responsibilities, and Deliverables
In terms of reference (ToR), roles define the key stakeholders involved in a project, committee, or initiative, specifying their authority levels to ensure clear governance structures. Typical roles include the chair, who leads meetings and facilitates decision-making; members, who contribute expertise and participate in deliberations; and the secretariat, which handles administrative support such as documentation and coordination. These roles may be designated as decision-making, where participants hold authority to approve outcomes, or advisory, providing recommendations without binding power, to align with the initiative's objectives and prevent overlaps in authority.[20][21] Responsibilities outline the specific duties assigned to each role, promoting accountability and efficient collaboration. These often encompass reporting progress to stakeholders, conducting consultations with relevant parties, and ensuring compliance with ethical or regulatory standards. A common tool for clarifying these is the RACI matrix, which categorizes duties as Responsible (performing the task), Accountable (owning the outcome), Consulted (providing input), or Informed (receiving updates), helping to delineate expectations and reduce ambiguity in team dynamics.[22][21] Deliverables represent the tangible outputs expected from the initiative, such as final reports, policy recommendations, or action plans, each accompanied by defined quality criteria and acceptance standards. For instance, a report deliverable might require structured sections on findings and implications, adherence to formatting guidelines, and validation through peer review to meet acceptance thresholds. These specifications ensure outputs are measurable and aligned with stakeholder needs.[4][1] Accountability mechanisms within ToR establish reporting lines, such as regular updates from the project lead to a steering committee, and escalation procedures for addressing non-compliance, like delays or deviations from duties. These structures, often detailed in a governance section, enable oversight and corrective actions to maintain project integrity.[4][21]Timeline, Resources, and Constraints
The timeline section within terms of reference delineates the project's chronological framework, specifying start and end dates, key milestones, and interim review points to ensure structured progression. This typically includes a high-level schedule outlining phases such as initiation, execution, and closure, often integrated with tools like Gantt charts to visualize task sequencing and dependencies. For instance, in evaluation projects, milestones may encompass submission of an inception report within the first month, progress updates at quarterly intervals, and a final report by the project's conclusion, allowing for iterative feedback and adjustments.[4][1][23] Resources in terms of reference detail the allocation of necessary assets to support the defined scope, including budget breakdowns, personnel needs, tools, and facilities, with justifications linked to anticipated workload and outputs. Budgets cover direct costs such as team salaries, travel, and equipment, often ranging from modest amounts for short-term engagements to substantial funds for complex initiatives, ensuring fiscal accountability. Personnel requirements specify team composition, qualifications, and expertise—such as requiring a lead evaluator with at least five years of relevant experience—while tools might include software for data analysis or access to existing datasets, all tied to fulfilling logistical demands without excess. Facilities, like office space or data collection venues, are outlined where applicable, with provisions for agency support in coordination. These elements briefly align with roles outlined elsewhere to optimize human and material inputs.[4][1][23][24] Constraints identify external and internal limitations that may impact execution, such as regulatory requirements, risk factors, or dependencies on third parties, to set realistic boundaries and mitigate potential disruptions. Common examples include legal barriers restricting data access, funding approvals contingent on stakeholder sign-off, or time-sensitive dependencies like seasonal fieldwork availability, which necessitate contingency planning. Risks, such as poor data quality or selection biases in evaluations, are flagged to inform methodology adjustments, while broader limitations like geographic scope or ethical considerations ensure compliance without overextension.[4][23][24] Monitoring provisions in terms of reference establish mechanisms for oversight, including defined metrics and reporting cadences to track adherence to the timeline and resource utilization. Progress is typically assessed through periodic reports—such as quarterly submissions or steering committee reviews—evaluating completion rates against milestones and budget variance. Key performance indicators might include percentage of tasks achieved on schedule or resource expenditure ratios, with escalation protocols for deviations, ensuring proactive management and accountability throughout the engagement.[4][1][23]Applications Across Contexts
In Project Management
In project management, terms of reference (ToR) serve as a foundational document that defines the project's boundaries, objectives, and key parameters, often functioning as a streamlined subset of the project charter to establish a baseline for approval during the initiation phase. In the Project Management Body of Knowledge (PMBOK) Guide by the Project Management Institute (PMI), the project charter authorizes the project and includes high-level scope, while ToR is used in procurement management to provide detailed technical scope elements, such as deliverables and constraints, to align stakeholders early and prevent deviations. This integration supports PMBOK's emphasis on project integration management, where ToR helps formalize the initiation processes to secure resources and authority for the project manager.[25][26][27] The application of ToR varies significantly between agile and waterfall methodologies, reflecting their core philosophies of adaptability versus predictability. In waterfall approaches, ToR is typically fixed and comprehensive at the outset, capturing all requirements upfront to enforce rigidity and sequential progression through phases like planning and execution, minimizing changes once approved.[28][29] In contrast, agile methodologies employ adaptive ToR that evolve iteratively, allowing updates based on feedback during sprints to accommodate changing priorities while maintaining overall alignment with business value.[30][31] A representative case is a ToR for a software development project, which outlines phases such as requirements gathering, design, implementation, testing, and deployment to ensure deliverables like functional prototypes and user documentation are met within defined timelines and budgets. For instance, the ToR might specify testing protocols to verify system integration, drawing from general scope elements to guide vendor proposals and milestone approvals.[32][27] Success of ToR in projects is measured through alignment with key performance indicators (KPIs), such as on-time delivery and budget adherence, where clear ToR mitigates risks like scope creep—a factor in 52% of projects as of 2018 according to PMI research. Effective ToR implementation correlates with higher success rates, as organizations prioritizing requirements management (including ToR) report improved outcomes in meeting objectives, with scope optimization identified as a top contributor to project delivery.[33][34]In Organizational Governance
In organizational governance, terms of reference (ToR) serve as foundational documents for boards and committees in both corporate and non-profit entities, defining operational parameters to ensure effective oversight and accountability. For instance, audit committees typically have ToR that mandate at least three meetings per year and establish a quorum of at least two independent non-executive directors to review financial reporting and internal controls. Similarly, remuneration committees' ToR often require a minimum of three members, with a quorum of two, to determine executive pay policies in alignment with performance metrics and shareholder interests. These structures promote structured decision-making and prevent conflicts within permanent governance bodies.[35][36] ToR in organizational governance must comply with international and regulatory standards to enhance transparency and investor confidence. The G20/OECD Principles of Corporate Governance, originally issued in 1999 and revised in 2023, recommend that boards establish committees with clearly defined ToR to oversee key functions like auditing and risk management, ensuring independence and regular reporting. In the United States, the Sarbanes-Oxley Act of 2002 requires public companies to have independent audit committees with ToR specifying responsibilities for financial oversight, directly influencing corporate ToR to include provisions for external auditor selection and whistleblower protections. Non-profits often adapt similar ToR frameworks to align with governance codes like those from the Association of Governing Boards, emphasizing fiduciary duties.[37][38] A representative example of corporate governance ToR is that of a board's ethics and compliance committee, which outlines ethical guidelines such as adherence to anti-bribery policies and procedures for conflict resolution, including disclosure requirements and recusal protocols to maintain integrity. Such ToR ensure that governance processes address potential misconduct promptly and fairly.[39] Since 2020, the role of ToR in organizational governance has evolved to incorporate environmental, social, and governance (ESG) factors, reflecting heightened stakeholder demands for sustainability integration. The 2023 G20/OECD Principles explicitly call for ToR to include oversight of sustainability risks, leading many boards to establish dedicated ESG committees with mandates for monitoring climate impacts and diversity initiatives. For example, sustainability committee ToR now often require annual ESG reporting and alignment with global standards like the Task Force on Climate-related Financial Disclosures, enhancing long-term resilience in both corporate and non-profit settings. The 2025 OECD Corporate Governance Factbook highlights ongoing implementation of these principles, with many jurisdictions updating ToR to strengthen ESG oversight in board committees.[37][40][41]In Public Inquiries and Investigations
In public inquiries and investigations, terms of reference serve to define the precise remit of the inquiry, ensuring a focused examination of matters of significant public concern while maintaining impartiality and adherence to legal standards. For instance, in the UK's Leveson Inquiry (2011-2012), the terms of reference directed the panel to inquire into the culture, practices, and ethics of the press, including its relationships with the public, police, and politicians, and to make recommendations for a new regulatory framework.[42][43] This delineation prevents scope creep and aligns the inquiry's proceedings with its statutory objectives, emphasizing transparency and accountability in addressing ethical lapses such as phone hacking scandals. The legal foundation for such terms of reference in the UK is primarily provided by the Inquiries Act 2005, which empowers ministers to establish statutory inquiries and set their terms of reference, including the authority to compel evidence, summon witnesses, and gather documents. Under section 5 of the Act, the minister must consult the proposed chair before finalizing or amending the terms, ensuring they reflect the inquiry's purpose while granting powers essential for thorough investigation, such as the ability to hold private or public hearings as needed.[44] This framework applies to most modern public inquiries, distinguishing them from non-statutory ones by providing robust enforcement mechanisms to uphold the inquiry's impartiality. Distinctive features in these terms of reference often include requirements for public consultation to refine the scope and provisions for confidentiality to protect sensitive information. Public consultation may occur prior to finalizing the terms, allowing stakeholders to influence the inquiry's focus and enhance legitimacy, as seen in various inquiries where interested parties submit views on proposed remits.[45] Confidentiality clauses, governed by section 19 of the Inquiries Act 2005, permit restrictions on disclosure if necessary to fulfill the terms or serve the public interest, such as safeguarding national security or personal data during evidence handling.[46] The terms of reference profoundly shape the outcomes of public inquiries by bounding the final report's content and recommendations, which, though not legally binding, frequently drive policy reforms. In the Leveson Inquiry, the terms guided the 2012 report's proposals for an independent press regulator, influencing subsequent legislation like amendments to data protection laws and the establishment of bodies such as the Independent Press Standards Organisation (IPSO), thereby impacting media ethics and public trust in institutions.[47][48] This influence underscores the terms' role in translating investigative findings into actionable, policy-oriented guidance.Creation and Implementation
Steps for Developing Terms of Reference
Developing terms of reference (ToR) requires a systematic approach to ensure the document effectively outlines the purpose, boundaries, and expectations for a project, committee, or evaluation. This process typically begins with thorough preparation and progresses through consultation, drafting, review, and finalization, drawing on established guidelines from international organizations to promote consistency and compliance.[4] Step 1: Stakeholder ConsultationThe initial step involves identifying and engaging relevant stakeholders to gather inputs on needs, expectations, and priorities, fostering ownership and alignment from the outset. This includes consultations with internal teams, external partners, and subject matter experts to define the overall purpose and key requirements, such as evaluability and resource estimates. For instance, in evaluation contexts, stakeholders like line ministries or project units provide feedback on objectives and scope to ensure the ToR addresses real-world demands.[4] Step 2: Drafting Core Elements
Once inputs are collected, the next phase is drafting the ToR's fundamental components, including objectives, scope, roles, responsibilities, deliverables, timeline, resources, and constraints, while maintaining a concise format of 5–10 pages using plain language. Templates from authoritative sources, such as the World Bank's evaluation guidelines or OECD frameworks, facilitate this by providing structured outlines for these elements, ensuring comprehensive coverage without redundancy. These core elements serve as the foundation for guiding activities and expectations.[4][49] Step 3: Review and Iteration
The draft undergoes multiple rounds of review and revision to incorporate feedback, verify accuracy, and ensure compliance with organizational standards, including legal and ethical vetting for issues like procurement procedures and codes of conduct. This iterative process may involve steering committees or external consultants clarifying ambiguities, with revisions tracked to refine the document until it meets all stakeholder needs.[4] Step 4: Approval and Dissemination
Final approval is obtained from authorizing bodies, such as senior management or a governing committee, after which the ToR is disseminated to all involved parties, often with version control mechanisms like numbering drafts (e.g., 1.0, 1.1) to track changes and maintain an audit trail. This step formalizes the document as the binding reference for the initiative, enabling contractual arrangements and ongoing implementation.[4] Common tools for this development process include word processing software with built-in templates, such as Microsoft Word, for initial drafting, and collaborative platforms like Asana for tracking stakeholder feedback and iterations in real-time. These tools enhance efficiency by supporting version history and shared access.