Delegation of authority (often shortened to DoA) is the policy that says which decisions each role may make on the company's behalf, and up to what limit. It usually covers spending, signing contracts, hiring, pricing and discounts, write-offs and bank access. The owners or the board grant authority to the CEO, who delegates parts of it down the organization.
The DoA is the policy. The approval matrix is the operational table that puts it to work in day-to-day requests.
Why it matters
Without a written DoA, authority is whatever people assume it is. A sales manager offers a discount nobody can afford, or an office manager signs a three-year lease. A clear DoA protects the company and the people making decisions, because they know exactly where their authority ends.
Example
An illustrative entry: the CEO delegates to the VP of Operations the authority to sign supplier contracts up to $50,000 a year. While the VP is on leave for two weeks, the Director of Operations may approve in their place, but only within the same limit and only for those two weeks.
Common pitfalls
- The policy exists in a PDF, but the systems people use do not enforce it.
- Temporary delegations that never expire.
- Delegating to someone who reports to the person whose requests they will approve.
- Stand-ins who can raise their own limits, or sub-delegate further without anyone knowing.
- No record of who held the authority on the day a decision was made.
In Easyflow, an out-of-office delegate sends approvals to the stand-in while someone is away.