Dead stock: admitting what is never going to sell
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A delegation of authority sets out who can approve what, up to which amount. How to structure a delegation of authority matrix, what to include, and how to stop it drifting away from how decisions are really made.
A delegation of authority (DoA) is the document that sets out which decisions the board keeps for itself and which it hands down — to the chief executive, to directors, to managers — and up to what limits. It answers the question every growing company eventually hits: who is allowed to approve this? Without a delegation of authority, the answer is whoever is most senior in the room, which is slow for small decisions and dangerous for large ones.
Set limits from real decisions, not from a template. Look at the last year of purchase orders, contracts and hires, and ask where approval currently happens and where it should. Limits set too low push routine decisions up the chain and create queues for executives; limits set too high remove oversight where it matters. Two distinctions prevent most loopholes: count the total contract value rather than the monthly amount, and treat unbudgeted spend at a lower limit than budgeted spend.
Splitting a purchase into smaller orders to stay under a limit is the classic way a delegation of authority is defeated. State explicitly that related purchases are aggregated, and check for it.
Ettex Records suits the matrix itself: one row per decision category and level, with the limit, the conditions and the date approved, plus a separate table for temporary delegations with their start and end dates. When the matrix lives as data rather than a PDF, the same limits can drive an approval workflow, and signing authority for contracts and bank payments can be derived from it instead of maintained separately.
Delegation of authority decides who may approve a decision and up to what limit. Segregation of duties ensures no single person controls every step of a transaction. Most control frameworks need both.
The board of directors, because the authority being delegated is ultimately the board's. Any later changes should also be board-approved.
Only if the delegation of authority allows it. Sub-delegation should be written, limited and recorded, otherwise accountability becomes impossible to trace.
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