Every company should prepare a document with guidelines setting forth:
The types of material transactions that require board approval under such guidelines should be disclosed in the company's Annual Report.
This Guideline covers matters that require the decision and approval from the Board.
The Board may delegate the normal business operations and day-to-day running of the company to management. However, certain matters require its specific approval:
- Annual plans, risk appetite and performance targets for the company.
- The establishment of effective procedures to monitor and control operations including internal audit, risk and compliance procedures.
- The authority or the delegation of authority to approve an acquisition, disposal, investment, capital expenditure or realisation or creation of a new venture.
The Board is to decide which matters that it needs to approve. These should be documented and communicated within the company, and disclosed in the annual report.
A leading approach to documenting approving authorities and/or limits is to establish a formal Authority Grid. It clearly delineates the participation types and approval limits of the CEO, Board Chairman, Board Committees, and the full Board.
B. SGX Disclosure Guide
- What are the types of material transactions which require approval from the Board?
C. Related Rules and Regulations
D. CG Guides
- Board Guide 2.2: Authority [Board Composition].
- Board Guide Appendix 2C: Board Powers and Delegation [Board Composition].
- Board Guide Appendix 6G: Authority Grid [Board Relationships]
E. Related Articles