Module 1 · Chapter 2

Matters Reserved and Delegation

Some decisions belong only to the board. Management takes the rest, within written limits. This chapter shows how to tell which is which, and why splitting a purchase to fit a limit is a breach.

≈ 13 min read 8-question test

In this chapter

  • Which decisions only the board may take, and why those
  • How to read a threshold: "exceeding", whole-term value and adding up
  • What management may approve alone, and why a split purchase is a breach

2.1The two lists in one paragraph

The charter puts every decision on one of two lists. Schedule A lists the Matters Reserved: twenty decisions that only the board may take. Schedule B sets out the Delegated Authority: who in management may approve what alone, and up to what figure. Every paper that reaches you belongs to one list, and your first task is to say which.

A director must act within the company's constitution (section 171). The Articles leave the board to set its own procedure, and the charter is that procedure, written down.

Key point

Reserved means only the board. No director, committee or employee may decide a Matter Reserved, or commit the company to one, until the board has decided it (§2.1). A committee may recommend, but it never decides one. If a paper says a committee "approved" a Matter Reserved, send it back.

Also in this chapter

  1. The twenty decisions the board keeps
  2. How to read a threshold
  3. What management may approve alone
  4. The rules that keep the limits honest
  5. The decisions the shareholders keep
  6. One purchase is one purchase
  7. Your job

Preview

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