What is a Delegation of Authority?
A DoA defines decision rights: which role can approve which type of decision, within which limit, and who must be consulted or informed. It is usually laid out as a matrix — decision types down the side, roles across the top.
Authority is delegated; accountability is not. The person who delegates is still responsible for setting sensible limits and checking that they are followed.
Why a DoA matters
- Faster decisions — routine approvals happen at the right level, the same day.
- Control — big or risky commitments still go to senior people.
- Clarity — no more “who should sign this?”.
- Audit and compliance — a clear trail of who approved what, within which limit.
- Growth — leaders spend time on strategy instead of approving every purchase.
Sample DoA matrix
The amounts are illustrative — set yours based on your size, margins and risk appetite.
| Decision | Department head | General manager | Managing director | Board |
|---|---|---|---|---|
| Purchase order (budgeted) | Up to ₹50,000 | Up to ₹5 lakh | Up to ₹25 lakh | Above ₹25 lakh |
| Purchase order (not budgeted) | — | Up to ₹1 lakh | Up to ₹10 lakh | Above ₹10 lakh |
| Hiring (within approved headcount) | Recommend | Approve | Inform | — |
| New position (outside headcount) | Propose | Recommend | Approve | — |
| Customer discount | Up to 5% | Up to 10% | Up to 20% | — |
| Write-off of stock / dues | — | Up to ₹25,000 | Up to ₹2 lakh | Above ₹2 lakh |
| Capital expenditure | — | Up to ₹2 lakh | Up to ₹20 lakh | Above ₹20 lakh |
How to build a DoA matrix
- List the decisions that matter: spending, hiring, pricing and discounts, contracts, write-offs, capex, legal and banking.
- Map today's reality — who actually approves these now, and how long it takes.
- Set limits by level, based on amount and risk, not on seniority alone.
- Add rules: no splitting a purchase to stay under a limit; no approving your own expense; two signatures above a threshold.
- Get the board or owners to approve the matrix formally.
- Communicate it, and build it into your approval workflows so the system follows the rules.
- Review limits every year, and after any reorganisation.
Common DoA mistakes
- Limits so low that everything still goes to the top.
- A matrix that exists on paper but not in the approval system.
- No rule against splitting orders to avoid a limit.
- Not updating the DoA when people or roles change.
How DOOfy helps
A DoA works best when it is built into the workflow, not kept in a PDF. With DOOfy, approval rules can be set as policy: routine actions within limits go ahead, and anything above a limit waits for the right person's approval — with a record of who approved what.
Frequently asked questions
What is a DoA matrix?
A table that lists decision types against roles and shows who can approve each decision and up to what limit. It is the practical form of a Delegation of Authority policy.
Who approves the Delegation of Authority?
Usually the board of directors or the owners. They delegate authority to the managing director, who further delegates within the limits the board has set.
How often should the DoA be reviewed?
At least once a year, and whenever the organisation structure, key people or business size change significantly.