The Limits of a Limits Schedule: Proving Delegated Authority Quarterly

Most boards approve a delegated authority schedule once, usually amid a wider governance refresh, and then treat it as settled. The document is filed, the thresholds are noted, and the business moves on. Months later, the register may still look tidy while the practical question — who can commit this company, to what value, and with whose approval — has quietly changed.

The risk is not that directors have forgotten the schedule. It is that the schedule has stopped describing the organisation. A finance director leaves and a replacement signs under an old mandate. A subsidiary adopts a local exception that is never mapped back to the parent. A committee approves a contract within its terms of reference, but the quorum was not what the register assumed. None of these is necessarily a failure of judgement. They are the ordinary consequence of a living business operating against a static document.

A quarterly test is therefore less about bureaucracy and more about proof. The aim is not to audit every signature or create a new committee cycle. It is to give the board a short, evidence-based answer to a simple question: if we had to rely on the register tomorrow, would it hold?

Why the register drifts

Delegated authority sits at the intersection of several moving parts: people, roles, thresholds, bank mandates, committee terms of reference, subsidiary constitutions and commercial practice. Each can change independently. A promotion may expand practical authority before the written mandate catches up. A new banking platform may introduce payment approvers who are not reflected in the register. A subsidiary may reserve a local decision to its own board without the parent schedule noting the exception.

The drift is rarely dramatic. It is usually a series of small gaps that become visible only when someone tests a transaction, a renewal or an escalation. That is why a document review alone is insufficient. The register must be compared with evidence of how authority is actually exercised.

A four-part quarterly test

The test can be completed within a reasonable governance cycle if it is scoped by sample rather than by exhaustive checking. Four areas will usually give the board enough signal.

1. Contract commitments

Select a small sample of contracts entered into since the last test, including at least one above the highest delegated threshold and one near a threshold boundary. For each, confirm the signatory, the value, the approving body and the evidence of approval. The question is not whether the contract was commercially sound; it is whether the authority route matches the register. Where a committee approved the commitment, check that its terms of reference and quorum were met at the time.

2. Bank mandates and payment authority

Bank mandates are a common source of quiet misalignment. Compare the live mandate, including online banking roles and payment approvers, with the register. Then test a payment above the relevant threshold to confirm that dual authorisation and limits operate as intended. If the company uses several accounts or banking providers, sample across them rather than assuming a single mandate covers the group.

3. Subsidiary exceptions and reserved matters

List the delegations that apply in subsidiaries and confirm which are standard, which are local exceptions and which are reserved to the parent board. Check that exceptions have been approved through the correct route and that intercompany guarantees or commitments are visible in the parent register. A subsidiary schedule that has not been reconciled to the group position is a governance gap waiting to be discovered by a transaction.

4. Escalation routes

Take a recent near-threshold request or construct a realistic scenario and trace how it would escalate. Confirm that the route is known to the people who need it, that the approving body has current terms of reference, and that the register identifies any fallback if the usual approver is unavailable. Escalation is often assumed rather than tested; a short walkthrough is usually enough to expose ambiguity.

Evidence that is proportionate

A quarterly test should produce a one-page record: the scope, the sample selected, the exceptions found, the owner of each remedy and the date by which it will be closed. That record belongs in the governance file and should be reported by exception to the board or its audit committee. There is no need for a new standing agenda item if the existing risk or assurance cycle can absorb it.

The discipline is in the sampling and the evidence. A statement that the register has been reviewed is weak. A statement that five contracts, two bank mandates and three subsidiary exceptions were tested, with two remediation actions and named owners, is assurance the board can use.

Before the next renewal season

Timing matters. A test run four to six weeks before a major round of renewals and signings gives the business time to correct the register before commitments are made, rather than after. Freeze the current version of the register, compare it with the authorised signatory list, the bank mandate, subsidiary resolutions and committee terms of reference, and record the differences. Where the business has changed faster than the document, amend the document and note the approval.

The board conversation can then be short. Directors should ask what has changed since the last test, what was approved outside the register, and what remains open with a remediation date. Those three questions do more for control than a lengthy review of the schedule itself.

Delegated authority is not a filing obligation. It is the operating system for commitments. A quarterly test, proportionate in scope and evidenced by sample, keeps that system honest without adding unnecessary weight to the governance calendar.