A FTSE SMALL CAP Company Secretary writes...
How do PLCs govern contract signing – and are there any generic procedures that they might be willing to share (suitably redacted)?
[Copies can be sent via dm@equitycomms.com]
Of particular interest is the management of subsidiary OpCo directors and any use of authority limits or other controls you might have in place.
My current company has a fairly simple rule – any significant contract (defined broadly) must be approved in advance by the divisional board (the membership of that board includes the group CEO, FD and GC/Co Sec.
This is in addition to the normal financial approval processes for capital and income expenditure, with financial limits set to require Group approval beyond certain levels.
At my previous company there was a more detailed and formal contracts approval process – with greater definition of what was a material contract that was caught by the process, and formal “sign offs” of the contract by various functional heads (legal, commercial, risk, financial) before it could be signed. With a weekly conference call as a standing item at which any material contract was approved.