What Is a Board Signatory?

A board signatory is someone who is authorized to sign agreements and contracts for an organization. They are granted this power through formal procedure in the company’s founding documents or through a resolution approved by the board. The resolution or document outlines the extent of their authority as well as how it is restricted. This clarifies the situation both within the company as well as externally to business partners as to who has the legal authority to bind the firm to agreements.

The term “board signatory” is often used to refer to a specific person responsible for approving significant expenditures and crucial decisions for an organization, for example, purchasing new office equipment or signing a contract with a supplier. They could https://creativetrance.com/why-data-security-should-be-a-priority-in-virtual-data-rooms/ also be accountable for negotiating better prices or terms for procurement, and they are likely to be able to review and make modifications to contractual arrangements as well.

To ensure the best results, those who have these powers must review their internal procedures and communicate them to authorized signatories so that they have a thorough knowledge of the organization’s mission and goals. This allows them to make informed decisions regarding how they exercise their authority. It also reduces the chance that they’ll engage in unintended or contradictory actions. For instance, it’s common for companies to use dual authorization or approval procedures to limit the potential for misuse. This is done by ensuring that at least two individuals examine and approve activities before they are carried out.