A board signatory is an individual who is authorized to sign contracts and agreements for the company. They are granted this authority through a formal process in the company’s documents of foundation or through a resolution that is approved by the board. The document or resolution outlines the extent of their authority, including how it is limited. This provides clarity internally within the company as well as externally to business partners regarding who has the legal authority to make agreements binding on the company.
The term «board signatory» is commonly used to refer to a particular person who is responsible for approving significant expenditures and crucial decisions for an organization, such as purchasing new office equipment or setting up a contract with a supplier. They may be also required to negotiate better pricing or terms for procurement, and they are likely to be able to review and make changes to contractual arrangements, too.
To ensure the best possible outcome organizations that give these powers must carefully review and communicate their internal procedures to ensure that authorized signers are aware of the organization’s mission and goals. This helps them make informed choices about how they use their authority and minimizes the chance of unintended or contradictory How Data Room Providers Can Accelerate Your M&A Process actions. For example, it’s common for businesses to implement dual approval or authorization processes to limit the potential of misuse by ensuring that at least two individuals scrutinize and approve the activities before they begin.