The documentation of the Delegation of Authority Matrix is a key requirement of internal control in business entities as it defines the financial and administrative responsibilities and authorities delegated to the incumbents in charge of approving the decisions and transactions within business entities. This will enhance the control and governance of the workflow of official transactions in the business entities and prevent fraud and deceit. This concept applies to all business entities on an optional basis.
For companies regulated by Capital Markets Authority in the State of Kuwait, they should comply with the requirements of the Executive Regulations of Law No. 7 of 2010 comprising sixteen modules where Module 15 – Corporate Governance – contains controls for the requirement to observe the Four Eyes Principles when delegating the financial and administrative authorities in order to achieve the internal control.
Module 15 – Corporate Governance – sets forth:
|Article 3-7||Item 11, the Board of Directors’ responsibilities include the following|
|Article 3-7||Item 12, the Board of Directors’ responsibilities includes:|
|Define the authorities delegated to the executive management, decision-making procedures, and the delegation period. The Board of Directors shall also determine the matters for which it reserves the authority to decide thereon.|
|Article 6-6||The company shall have internal control systems, which cover all the company’s activities. The internal control systems maintain the company’s financial soundness, data accuracy, and effectiveness of its operations in various aspects; provided that the company’s organizational structure shall consider the Four Eyes Principles of the internal control process (Four Eyes Principles).|
Added value to business entities from Delegation of Authority Matrix Services
- Clearly define the responsibilities, allocate the work duties, and increase productivity.
- Organize the business and define the roles.
- Provide a quick decision-making process and create an atmosphere of trust.
Services provided by Baker Tilly Kuwait
Development of Delegation of Authority Matrix.
- Organizational Structure
- Job Structure
- BOD & its Committees Charters
- BOD & Executive Management Performance Appraisal Systems
- Corporate Performance Appraisal Systems
- Code of Professional Conduct and Ethics
- Processes, Policies and Procedures Manuals
- Job Descriptions
- Salary Survey
- Compensation and Benefits Structure
- HR Planning System
- Employee Performance Appraisal Systems
- Qualifying Business Entities for ISO Certificates