Published on:

Delegated authorities are the formal, written embodiments of power in companies

The official bestowal on a general counsel of corporate powers is known in the United States as a “delegation of authority.” The Board of Directors, in theory and often in practice, assigns to the CEO a broad set of powers, and the CEO in turn sub-delegates a portion of those to the top legal officer. That officer parcels out to the direct reports a restricted version of that authority to do certain things, and so on. A common example is the authority to sign off on invoices of outside counsel up to set amounts.

By this formal cascade of rights, for instance, the law department has delegated authority to retain outside counsel and no other person, possibly, has that important privilege. Another common delegation of authority to the legal department requires it to approve a settlement of litigation. There may be other delegations, such as required involvement in corporate combinations like joint ventures or M&A transactions. Good corporate governance makes clear such parameters of authority and obligation.

Posted in:
Published on:

Comments are closed.