Delegation of Authority (DOA) is the cornerstone of the effective and efficient operation and performance of any organisation. There are several best practices – and the list is constantly evolving – of what constitutes Delegation of Authority framework’s contribution to Good Governance.
1. Actually put DOA in place!
Good Governance begins with just clarifying and documenting the delegations of authority that apply within an organisation. After all, every employe should understand who within their organisation has authority to make decisions, especially if it is not themselves. The internal Delegation of Authority will therefore assist employees to understand their authority to make commitments on behalf of the organisation.
iDelegate makes putting a Delegation of Authority in place easy with its simple structure and a set of preloaded delegation items.
2. Harness DOA to enable performance
Implemented right, the Delegation of Authority is not a hinderance to effective decision making. In fact, it empowers employees by providing clarity as to who is authorised to make what decisions. This dramatically cuts on pushing every decision up the chain of command, or chasing wrong persons. Time saved on confusion equals to a boost in productivity.
iDelegate can include every person in the organisation so that everyone is in the know.
3. Use DOA to confirm and manage accountability as a fundamental component of a risk management framework
Delegations of authority clarify the accountability structure in the organisation. They do not reassign responsibility, but their acceptance creates the environment of accountability for those empowered with the authority, and sets the limits of those powers. This is important not only for the top managers, but equally for front-line operators whose authority to commit on behalf of the organisation is often unclear. Therefore, Good Governance views delegations of authority as a fundamental component of a risk management framework.
By tracking reach and acceptance of delegations from top to bottom, iDelegate creates comprehensive accountability records for audit and performance management purposes.
4. Customise DOA appropriately to the needs of the organisation
Every Delegation of Authority framework must fit the size and complexity of the organisation. It addresses risks associated with decision making and the organisation’s strategic objectives. It is a waste of time and effort trying to cover every conceivable angle from the start; having the Delegation of Authority grow with the organisation is way more effective. It is also part of Good Governance to regularly review Delegation of Authority and adapt it to operational changes or when there is a switch of personnel in a role.
The iDelegate app makes it easy to change or withdraw delegation items, increase or reduce delegation limits or grant spot authorities in real time. It will always fit the organisation like a glove.
5. Make DOA accessible to all employees
It is Good Governance practice to communicate the Delegation of Authority to all employees. While it may be confidential in nature, the Delegation of Authority is rarely a secret document. Some organisations even make it available to external audiences as part of their wider Good Governance initiatives.
iDelegate is designed to make everyone aware of their authority easily and quickly. It confirms every DOA action with an email, remains accessible anytime and anywhere from a connected device, and can be integrated into existing corporate intranets.
6. Include both financial and non-financial delegation items
A Good Governance compliant Delegation of Authority framework addresses decisions which are not captured by only financial limit categories. Delegations of authority and the limits to those delegations may apply to decisions that sit outside a particular field of expertise or require specific treatment. For example, hire and contract termination of direct reports, Brand and organisational image communication in the media and opening/closure of legal entities are all good candidates for inclusion in the organisational Delegation of Authority document. Importantly, the framework should clarify that the authority to make a decision is separate from the authority to sign a legal document binding on the company.
iDelegate makes inclusion of financial and non-financial authorities easy through use of multiple categories and sub-categories for delegation items.
7. Document collaborations
Individual decisions that affect the wider organisation could also be risk factors unless they have been discussed and agreed upon internally. For instance, it is extremely common to specify that a sales leader can submit client commercial proposal subject to review and approval by Operations and Finance. Or that the country CEO may sign commercial contracts of a certain value, subject to the decision being pre-approved by the Zone Vice President.
iDelegate allows to document necessary collaborations and approvals using an equivalent of the popular RACI methodology. It visually displays who is responsible for the decision, who must approve, who needs to be consulted and whom to inform for each delegation item.
8. Delegate authority to roles, not people
It is best to delegate authorities to a role, not an individual. Clearly, there will always be an individual performing a certain organisational role within granted authorisation. However, it is best practice that e.g. Jennifer Mortimer receives her Delegation of Authority because she is a CEO, and not because she is Jennifer. This way, once Jennifer ceases to be the CEO, her delegation for this role ceases to apply.
iDelegate allows creation of ‘delegation bundles’ for specific roles (such as Regional Director, Country Manager etc) which can be delegated to individual role holders as needed.
9. Review delegated authorities and their limits regularly
Delegated limits must not be carved in stone. In fact, it is good practice to start with lower limits or reduced scope of authority on initial appointment and gradually increase them as experience growth. In addition, the Delegation of Authority policy itself should be reviewed regularly over 12 – 24 month period and adapted to the changing needs of the company.
iDelegate allows prudent Delegation of Authority management by facilitating easy increase, decrease or recall of previously granted authority at any moment.
For more information, read companion articles on why implement a Delegation of Authority framework at all and the benefits of a Cloud-based Delegation of Authority application.