A board signatory can be described as the person in charge of signing contracts and agreements on behalf of a business. They are authorized by a formal process, either in the founding documents of the company or in the resolution of the board. The extent of their authority and the limits of their authority are clearly outlined in the document or resolution. This helps ensure that there is clarity within the organization as well as externally with business partners on who has the legal authority to bind the company to agreements.
The term “board member” is used to describe someone who approves major expenditures as well as crucial decisions within an organization. For instance, approving the purchase of new office equipment or signing an agreement with an organization or vendor. They could be charged with negotiating better terms or pricing on the procurement side. They are likely to also be able to review and change contract arrangements.
For the most effective outcomes, organizations that confer these powers should consider and communicate their internal procedures to ensure that authorized signers are aware of the organization’s objectives and aims. This helps them make informed decisions about how they use their authority, and reduces the risk of conflicting or unauthorized actions. For instance, it’s standard for businesses to implement dual approval or permission procedures to limit the potential for misuse. This is done by ensuring that at least two individuals are able to review and approve actions prior to they occur.
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