Delegation of Authority Policy
Section Details
General The powers required by a company to carry its operations to
achieve its objectives vests in the Accounting Authority (Board of
Directors).
The Board of Directors (BOD) assigns responsibilities to the Chief
Executive Officer (CEO) to achieve the objectives of the company.
To achieve these objectives the BOD also delegates power to the
CEO. The CEO consequently assigns responsibilities and
delegates powers to his / her direct reports and consequently
these incumbents assign responsibilities and sub-delegates
powers to their sub-ordinates.
Officials delegations of authority are living documents and will
change if powers contained in them are affected by:
Resolutions by the Board of Directors
Amendments to the Materiality framework of the company
Amendments to the Company’s Act.
Powers There are certain powers that are reserved for the Board of
reserved for Directors. These powers cannot be delegated, regardless of the
the BOD amounts involved.
The powers that are reserved for the BOD include:
Financial
The adoption of any significant changes or departure in the
accounting policies and practices of the company.
The approval of strategy, business plans and annual
budgets and any subsequent material changes in strategic
direction or material deviations in business plans.
The approval of annual financial statements, the approval
of reports required by the Company’s Act.
The approval of the valuation of the company.
The declaration of dividends.
The recommendation to the Shareholders of any increase,
reduction or alteration to the share capital of the company
and the allotment, issue or other disposal of shares of the
company.
Approval of the annual salaries increment percentage.
Approval of significant investments \ disinvestments as
contained in the delegation matrix.
Approval or amendments of all company policies.
Statutory and administrative
Approval of amendments to the Memorandum or Articles of
Association of the company.
Concluding the Shareholder Compact and any related
performance agreement.
The appointment, removal or replacement of the external
auditors of the company (subject to final approval by the
Shareholders).
The frequency of meetings of the BOD, and the annual
BOD plan.
The convening of general meetings of the Shareholders of
the company.
The approval of recommended policies.
The prosecution, defence, settlement of legal or arbitration
proceedings which are not in the ordinary course of
business where material.
The appointment of responsible persons as may be
required in terms of any Act.
The granting of general signing authorities pursuant to the
Articles of the company.
The appointment, removal or replacement of the Company
Secretary and Chief Executive Officer, Chief Operations
Officer and Chief Financial Officer.
The variation of the rights attributed to shares where such
powers are vested in the BOD.
The formulation and amendment of the company’s Code of
Ethics and Conduct.
Regulatory
The approval and authority to issue circulars to the
Shareholders of the company.
The approval of and authority to issue prospectuses, listing
particulars, rights offers or takeover or merger documents.
Recommending to the Shareholders that they approve any
ordinary or special resolutions of the company.
Recommending that the Shareholders take a particular
course of action proposed by the BOD.
Approval of a decision to list the company’s shares on any
stock exchange or to terminate any such listing.
Human Resources
Recommending appointment to and removals from the
BOD
The appointment of and changes in the composition of the
Committees of the Board.
Approval of the terms of reference of the Committees of the
Board.
Recommendation of any increase in Board member’s fees
for approval by the Shareholders in a general meeting.
Approval of policies in relation to human capital
development.
General The assignment of responsibilities and the delegation of powers
documentation should be well documented and should be recorded in the
employment contracts and performance contracts of officials.
Sub- An official can sub-delegate powers that have been assigned to
delegation him / her to his / her subordinates as long as the power was
assigned to him / her without the power of sub-delegate being
limited. If an official does not want his / her subordinate to sub-
delegate the powers assigned to him / her, this must be stated
clearly in the Delegation of Authority agreement.
Powers should not be sub-delegated in general to all
subordinates, but to the specific subordinates that require the
powers to perform their duties.
Once the CEO has delegated powers to other levels of
management, particulars of such delegations must be presented
to the BOD for information and noting.
Sub- The powers delegated to an official are recorded in a Delegation
delegation of Authority agreement. The delegation power has to be recorded
agreements in detail and be signed by both the person sub-delegating and the
person who accepts the delegation of powers. All pages of the
document should be initialled and one witness per signatory is
required.
At the discretion of the officials sub-delegating and accepting the
sub-delegation, the Delegation of Authority agreements can be
replaced with a matrix (such as the Delegation of Authority
Framework) detailing the items and the limits sub-delegated per
item. The matrix descriptions are not as detailed as the delegation
agreements and both parties agree that they are aware of the full
text included per item in the delegation authority agreements. The
matrix needs to be signed by each party and their witnesses and
each page is to be initialled.
Approval of An official is responsible to ensure that he / she has the power to
transactions approve a transaction, contract etc. before the approval is
undertaken. If there is uncertainty as to whether an official has the
necessary power for an action this must be clarified before
approval is given.
Approval for transactions needs to be obtained within the
applicable business unit if this power has been delegated to an
official in the business unit.
Official may only approve transactions, agreements / contracts
etc. in respect of the specific business unit they are delegated.
Central A signed copy of each Delegation of Authority agreement or matrix
depository is to be sent to the Chief Financial Officer for safeguarding. This
will also allow Finance Unit to set up controls to ensure that
transactions are authorized in terms of the Delegation of Authority.
Acting When an official is not available for duty due to leave of any nature
Arrangements or when a position is vacant, authority can be obtained in writing
from the official’s superior that a specific person can act in the
official’s position for a specific period with absent official’s
delegation of authority.
No official can authorise that someone acts in his / her own
position. The acting must be authorized one level higher than the
position needing acting.
Deviation from The authority to deviate from policies of the company can only be
policy granted by the CEO for all other employees and for the CEO the
deviation can only be granted by the BOD.
