Delegating authority is an essential aspect of any organization. It ensures that tasks are completed effectively and efficiently. However, it is crucial to have proper rules in place to ensure that the delegation of authority is done correctly. Here are some general rules for delegating and exercising authority:

Firstly, authorities can be delegated to individuals, defined job positions, or levels in the organization. For practical reasons, it is preferable to delegate authorities to positions or levels rather than individuals where possible. This ensures that there is consistency in the exercise of authority.

Secondly, delegation of authority is a positive action. No one possesses authority unless it has been granted. Authorities must be explicitly delegated in order to be valid. An authority holder can delegate further the same or less authority but not more than they hold themselves.

Thirdly, authority holders are expected to take accountability for the decisions made under their delegated authorities. This means that they should ensure that they exercise their authority within their area of responsibility and that they are aligned with the requirements of the job.

Fourthly, delegated authorities must be aligned with the requirements of the job and can only be exercised within the authority holder’s area of responsibility. This means that the person exercising the authority must have the necessary skills and knowledge to carry out the task.

Fifthly, where the transaction is unusual, controversial, or sensitive in any political, regulatory, commercial, or technical sense, the authority holder must refer the authorization to a higher level of authority. This ensures that decisions that have far-reaching consequences are made by the appropriate people.

Sixthly, evidence is generally obtained by means of the authority holder’s original signature or, if circumstances require, electronic signature by fax, email, or system functionality. This ensures that there is a record of the decision-making process.

Seventhly, no one is allowed to exercise authority where this can result in a real or perceived conflict of interest between their private activities and their part in their organization. In such circumstances, the authority holder must refer the action or decision to a higher level of authority (e.g. supervisor).

Eighthly, the monetary authority limits represent the maximum amount that the authority holder can approve. Authority limits apply to a complete transaction, and it is not allowed to split transactions in order to use a lower monetary limit. This ensures that financial decisions are made within the organization's budget.

Finally, initiatives or decisions going beyond defined boundaries, including exercising authorities beyond the authority limit or without completion of due process supporting the authorization, may be taken only in cases of emergency. When this happens, the line manager and/or authority holder concerned must be notified soonest of the action taken.

In conclusion, these general rules for delegating and exercising authority are essential for any organization. They ensure that decisions are made by the appropriate people and that there is consistency in the exercise of authority. By following these rules, organizations can operate effectively and efficiently.

GABRIEL DOMALE CONSULTING is a management consulting firm that helps organizations in Africa to achieve sustainable growth, provides insights to leaders to make informed decisions, and drives institutional transformation.

We help companies to design delegation of authority process and systems and train their organisations to effectively implement.

Request for our services via email: info@gabrieldomale.com and leesi.gborogbosi@gabrieldomale.com 

Author,
Sir (Dr) Leesi Gabriel Gborogbosi

Sir (Dr) Leesi Gborogbosi is the CEO of Gabriel Domale Consulting (Management Consulting Firm), Rivers State, Nigeria, helping companies in Africa to grow, provide insights to leaders and transform institutions. He worked for Shell for 26 years with significant contributions to strategy, planning, budget, project management, finance, cost reduction, contracting boards, governance, risk management, compliance, and performance management.

He has a doctorate in business administration (strategy), a doctoral degree in business studies, an MSc (Research Methodology in Management) from IE Business School, Madrid, and an MBA (Finance and Banking) from the University of Port Harcourt, Nigeria; and BSc (Accountancy) from the University of Nigeria, Nsukka. He had his secondary education at Federal Government College, Jos, Nigeria. His doctoral dissertation focuses on strategy implementation, the role of oil and gas middle managers, and collaboration with oil and gas host communities.

He leverages his professional experience as a Certified Management Consultant (CMC); Fellow, Institute of Chartered Accountants of Nigeria; and The Institute of Management Consultants. Also, he is a Member of the Chartered Institute of Procurement & Supply, London, and the Nigerian Institute of Management.

He was nominated by the Strategic Management Society, Chicago for the "Best Conference Paper Prize Awards" in 2017 and 2015. He was appointed the Chair for the Session on “Leading change implementation processes” at the Strategic Management Society conference in Denver, United States in 2015.

Sir (Dr) Leesi Gabriel Gborogbosi has about three decades of leadership experience in the oil and gas industry. He is an expert in finance, strategy, corporate governance, transformation, cost management, leadership, training, and problem-solving. leesi.gborogbosi@gmail.com