Legally-compliant Delegation

Companies, organisations and institutions normally have a large number of employees. Accordingly there is a real need for delegation of accountabilities and decision-making authorities. It is the duty of the executive body to delegate accountabilities to their employees.

Delegations normally flow from the board to individuals within the company and provide the authority and accountability for them to take action. There are, however, two separate but related sets of delegations and authorities that flow top-down into the organisation:

• Legal entity delegation, which is established by applicable law, regulations, contracts or constitutional documents of the appropriate legal entity;
• Management delegation, which is established by the organisation to conduct its day-to-day activities and deliver its strategy and business plan.

The accurate recording of organisational obligations and consistent distribution of tasks is important in this context, so that neither gaps in competence nor any other obstructions exist. Accountable employees should be clearly named. Legally-compliant, delegated decision-making requires that:

The performance of a task is done voluntarily and is the individual's specific responsibility. In addition, delivery and completion of the required task must be feasible.   The delegated task is clearly understood. The delegating manager has the duty to brief, train and instruct the subordinate appropriately.   The financial resources necessary are available to the individual.   The transfer of the task and decision-making power to the individual is obvious. It must be clearly evident in writing who had which task and which decision-making authority at what time.

If a task or decision-making power is delegated, the delegating manager has accountability for selecting the right individual, the instruction of that individual and appropriate monitoring.  In crisis situations, the delegating manager must intervene immediately. Legal charges and any liability against the delegating manager will be dropped if negligence cannot be proved. If, however, the organisational task or duty is delegated to several employees at the same time, nobody is accountable except the delegating manager.