7 Challenges of Signature Authority Policies

Signature authority policies are an important part of internal controls. People need to sign off with the confidence that they have the authority to do so. If they don’t have the authority, the contract might be voidable. That’s quite a risk.

There are a number of items about signature authority that everyone knows. Subordinates should be prohibited from approving transactions for their superiors. There should be a segregation of duties so the one initiating a deal isn’t also the one approving it. For larger transactions, at least two signatures are required.

But here are 7 things you may not know about signature authority policies:

• Making the chart widely available
• Challenges of enforcement
• Use a “GC” catch-all
• Checking with finance first
• “Material” things require board approval
• Signing on behalf of defunct companies
• Getting “directors” to sign non-US deals

For many more Vid-Guides dealing with corporate & securities law, corporate governance, E&S issues and more – particularly if you want to review any Vid-Guides referred to during this Vid-Guide – see the list of Vid-Guides spread throughout these categories:

• Corporate Governance
• Proxy Season
• Executive Pay
• ’34 Act/Other
• ’33 Act/Deals
• Sustainability/E&S
• Career Advice
• Fun Party

And since all the content on ZippyPoint.com is complimentary, please “Pay-What-You-Can” to help keep this fine platform alive & well…