Delegation of authority
A delegation of authority matrix answers one question: who may commit this organisation to what, up to which limit, and what happens when they exceed it.
What is a delegation of authority matrix?
It is a written schedule mapping decision types to the level authorised to take them, with financial thresholds, and it names what the board reserves to itself. It exists so that authority is a property of the role and the amount, not of who happened to be available to sign.
- Reserved matters come first
- Thresholds have to be tested against reality
- Delegation in a group
- How Mithaq handles it
Reserved matters come first
Before deciding what to delegate, a board decides what it will never delegate. Typical reserved matters are the strategy and annual plan, the budget, borrowing beyond a threshold, acquisitions and disposals, related-party transactions, appointment and removal of the chief executive, the external auditor, and any change to the delegation matrix itself.
The last of these is the one that gets forgotten, and it is the one that protects all the others. If management can amend its own authority, the matrix is a suggestion.
Thresholds have to be tested against reality
A threshold set five years ago and never revisited produces one of two failures. Set too low, every routine purchase escalates to a board that then rubber-stamps a hundred items a year and stops reading any of them. Set too high, material commitments are made below the line and the board learns about them from the accounts.
The honest test is to run last year's actual transactions against the current matrix and count how many would have needed board approval. If the answer is more than the board can genuinely consider, the threshold is wrong, not the volume.
Watch for splitting. A commitment broken into three payments each below the threshold is the oldest way around a matrix, and it is detectable only if approvals are recorded against a counterparty and a project rather than against a payment.
Delegation in a group
In a holding structure the matrix has a second dimension: the entity. A subsidiary board has its own statutory powers, and the group cannot simply instruct it without the instruction passing through that board. The practical answer is a group matrix mirrored into each subsidiary's own board resolutions, with the group nominee director as the link.
This is also where the corporate record earns its keep. In diligence, the question is not whether a decision was sensible but whether the person who signed had the power to bind that specific entity on that date.
How Mithaq handles it
Mithaq carries a delegation-of-authority framework alongside sequential approval workflows, so an approval is routed by the rule rather than by whoever the requester chose to ask. Contracts, budget lines and expenses are approved against the same matrix, and the audit log keeps the trail.