C.3 Management functions
An issuer should have a formal schedule of matters specifically reserved for board approval. The board should give clear directions to management on the matters that must be approved by it before decisions are made on the issuer’s behalf.
When the board delegates aspects of its management and administration functions to management, it must, at the same time, give clear directions as to the management’s powers, in particular, where management should report back and obtain prior board approval before making decisions or entering into any commitments on the issuer’s behalf.
Note: The board should not delegate matters to a board committee, executive directors or management to an extent that would significantly hinder or reduce the ability of the board as a whole to perform its functions.
An issuer should formalise the functions reserved to the board and those delegated to management. It should review those arrangements periodically to ensure that they remain appropriate to the issuer’s needs.
Directors should clearly understand delegation arrangements in place. Issuers should have formal letters of appointment for directors setting out the key terms and conditions of their appointment.