Authorised signatories are individuals who have been officially authorised and designated to legally sign (execute) contracts and documents for and on behalf of an organisation.

Such authority is usually granted by formal resolution or delegation of authority of the Board or Shareholders (depending on organisation size and type). 

Authorised signatories may or may not be listed in official records of an organisation.

Depending on jurisdiction, certain officers of the company (Directors, Chief Officers etc.) may have authority to execute documents on behalf of organisations. 

For certainty, it is recommended that authorised signatories are formerly appointed and their authority to sign and execute contracts and documents formally recorded in official documentation.

Having formally appointed authorised signatories helps ensure that the organisation operates smoothly and that important documents are signed by individuals who have the appropriate level of authority.

Appointing authorised signatories / a signing authority would ordinarily involve the following:

◼️ Legal Authority: authorised signatories have the legal power to bind an organisation, and this authority must be properly conferred and recorded in official documentation  

◼️ Documentation: the names and titles of authorised signatories are commonly recorded in official documentation of the organisation they represent

◼️ Scope of Authority: the scope of authority for authorised signatories can vary. Signing authority must documented, both in terms of what can be signed, by whom, when and to what value.

◼️ Accountability: authorised signatories must be accountable for their actions, as must those employees who sign documents etc without any such authority.

In GLS legal ops, the Smart Schedules enabler is considered both a "Repeater" resource within legal operations.

A Repeater Resource: Supports multiple legal and business functions by standardizing schedules across different contract types and industries.

Specialist Resource

Implementing best practices for appointing and managing authorised signatories ensures clear roles and responsibilities and compliant behaviour.

It also augments (and is necessary for) an efficiently performing (and compliant) contracting function. Some best practice features of a properly implemented signing authority / authorised signatories are as follows: 

◼️ Formal Resolution: authorized signatories appointed via formal board resolutions or similar official documentation / delegated authority

◼️ Comprehensive Record: maintain up-to-date records of authorized signatories

◼️ Defined Scope of Authority: clearly defined who can sign what, and any authority limits / exclusions

◼️ Dual Signing: consider dual signing control for high-value transactions or critical documents

◼️ Regular Review: list of authorized signatories regularly reviewed to ensure it is correct

◼️ Document Changes: ensure that any changes in authorization are formally documented (and when)

◼️ Secure Access: implement a secure systems for managing signatures, e.g. digital or e-signature

◼️ Training Programs: provide training for authorised signatories on their roles & responsibilities

◼️ Awareness: authorised signatories must be notified about any changes

◼️ Signature Verification: implement measures to confirm the authenticity of signatures (e.g. e-sigs)

◼️ Review Mechanisms: ensure that authorised signatories are only signing properly approved docs

◼️ Legal Compliance: authorised signatories must be authorised in accordance with applicable laws

◼️ Accountability: authorised signatories must be accountable for their actions (and those signing with no authority)

◼️ Backup Signatories: implement contingencies for non-availability of authorised signatories.

◼️ Contingency Planning: Develop contingency plans to address scenarios where signatory authority needs to be reassigned quickly.

Authorised signatories play a crucial role in business operations and are essential for maintaining organisation integrity, efficiency and alignment, and can contribute the following value to the Business: 

◼️ Contractual Assurance: authorised signatories ensure that contracts and documents are legally binding and enforceable

◼️ Compliance: helps maintain compliance such that only authorised individuals are executing on behalf of the business

◼️ Streamlined Process: clear designation of signatories streamlines decision-making and approvals

◼️ Effective Delegation: allows distribution of workload for approvals and execution processes

◼️ Fraud Prevention: reduces risk of unauthorised or fraudulent transactions

◼️ Governance: authorised signatories acts as a check and balance against which business is conducted

◼️ Budget Control: authorised signatories may be involved in authorising expenditure

◼️ Transaction Integrity: only designated individuals can authorise transactions

◼️ Responsibility: clarifies responsibility and accountability within the organisation

◼️ Audit: facilitates record keeping of who signed what and when

◼️ Efficiency: enables the expedited execution of documentation and contracts

◼️ Better Alignment: authorised signatories tend to have oversight of major initiatives allowing better internal oversight and strategy

◼️ Enhance Credibility: makes it easier for counterparties to confirm your people are acting with proper authority

◼️ Reduce Conflict: removes basis for contested authority (whether internal or external)

Authorised signatories contribute to organisational integrity and can enhance compliance, mitigate risks, streamline process, support good governance, and can add the following value for the Legal Department:

◼️ Ensuring Compliance: ensure only properly authorised individuals are executing documents and contracts

◼️ Contract Validity: ensures validity and enforceability of executed agreements and documents

◼️ Prevent Fraud: can help prevent unauthorised or fraudulent activity and transactions

◼️ Error Reduction: reduces risk of errors and disputes arising from improperly executed documents

◼️ Clear Authority: establishes clear lines of authority and responsibility (essential for compliance)

◼️ Audit: facilitates audits and compliance checks by providing a clear record of who has authority

◼️ Efficient Execution: streamlines the execution of legal documents, contracts, and agreements,

◼️ Delegation: allows the legal department to delegate tasks and responsibilities effectively

◼️ Contract Approval: ensures that contracts are executed by individuals with the required authority

◼️ Evidence: provides a clear record and evidence that documents were executed properly

◼️ Defensibility: strengthens your position by demonstrating adherence to internal controls and process

◼️ Policy Compliance: supports compliance with corporate governance policies and procedures

◼️ Maintaining Reputation: ensures that all legal commitments are made by authorized individuals

Authorised signatories are essential for:

◼️ All Businesses: every business needs authorised signatories to legally execute documents

◼️ Legal Operations Teams: authorised signatories enable efficient and compliant document signing

◼️ In-House Counsels: reduce the burden of internal approval process and verification of executed docs 

◼️ Compliance Officers: establishes control methods and enables better prevention of unauthorised signatures

◼️ Senior Management: streamlining the delegation of authority and authority to execute 

A legal team operating without authorised signatories will face a wide range of inefficiencies including:

◼️ Inconsistency: inconsistent approach to the execution of legal agreements and documents

◼️ Delays: associated with identifying and accessing approved personnel to approve / execute

◼️ Unclear Authority: uncertainty and risk associated with informal execution process and procedure

◼️ Errors/Risk: organisational risk of documents being signed by individuals without proper authority

◼️ Enforcement Risk: documents/agreements that are improperly signed may be unenforceable

◼️ Compliance Risk: lack of definition around authorised signatories makes for a compliance nightmare

◼️ Internal Conflict: potential for confusion/conflict due to unclear or overlapping authority

◼️ External Disputes: counterparties may not accept or be unclear about authority of individuals

◼️ Reputation: counterparties may be unhappy that individual authority to sign is not defined

◼️ Tech Adoption: impairs ability to embrace legal tech that requires defined/established authority

◼️ Process Adoption: diminished/reduced ability to delegate workflows to identified individuals

◼️ Morale: deteriorating team morale due to unclear authority/internal conflict/increased resource drain

◼️ Bottlenecking: increased risks of bottlenecking with senior team members

◼️ Budgeting: risks unbudgeted an/or excessive/unplanned expenditure

◼️ Housing: authorised signatories should be identifiable and available electronically (no hard copies)

◼️ Legal Tech Configuration: CLMS, MLM, etc should be configured with authorised signatories

◼️ E-Signatures: organisations should embrace electronic signatures by authorised signatories

The GLS Knowledge Centre has a wealth of resources available for learning more about the importance of the Group Legal Policy and how you can effectively implement one - check out a few on the right.

The GLS Legal Operations Centre contains everything you need to effectively implement your own tailored Group Legal Policy in a cost-effective and timely manner. Check out the resources linked on the right. 

Also, feel free to contact GLS to book a consult to discuss your Group Legal Policy needs right here.