Governance
Delegation of Authority Matrix for Group Companies
By ATTPL HOLDCO / ATTPL GROUP Editorial Team · · 4 min read
How to build a delegation of authority matrix for group companies in India: who approves spending, contracts, hiring and loans across each entity.
What a Delegation of Authority Matrix Is
As a business group grows, the founder can no longer sign every purchase order, contract and offer letter. Decisions start happening in subsidiaries, plants and branch offices, often without a clear rule on who is allowed to approve what. A delegation of authority matrix, or DoA matrix, solves this by writing down approval limits for each type of decision and each role. This guide explains how group companies in India can design a practical DoA matrix that speeds up work while keeping control.
A DoA matrix is a table that lists decision types in rows and roles in columns. Each cell shows whether that role can initiate, review, recommend or approve, and up to what value. For example, a plant manager may approve routine purchases up to a set limit, while larger capital expenditure needs the subsidiary board and then the holding company.
It is not a substitute for statutory approvals. Some matters, such as certain borrowings, related-party transactions and investments, require board or shareholder approval under company law regardless of what the internal matrix says. The matrix sits within those legal requirements, not above them.
Why Group Companies Need a Common DoA Framework
Without a shared framework, each entity invents its own rules. That leads to inconsistent controls, delays when approvers are unclear and higher risk of unauthorised commitments. A group-level DoA matrix brings several benefits:
- Faster decisions because people know their limits
- Clear accountability when something goes wrong
- Consistent controls that auditors can test
- Better visibility for the holding company on material commitments
A DoA matrix also supports the wider risk process described in our group risk management framework for business groups in India, because it ties higher-risk decisions to more senior approvers.
A common framework also makes onboarding simpler. When a new subsidiary is acquired or set up, it can adopt the group matrix with adjusted limits instead of building approval rules from scratch.
Key Decision Categories to Include
Start with decisions that carry financial, legal or reputational weight. Common categories are:
- Operating expenditure and purchase orders
- Capital expenditure and asset disposal
- Customer and vendor contracts, including credit terms
- Borrowings, guarantees and intra-group loans
- Hiring, salary revisions and terminations
- Legal matters, settlements and regulatory filings
- Bank account opening and signatory changes
For contract approvals, it helps to define when legal review is mandatory. Support from corporate legal services can set standard templates so that only non-standard terms need escalation.
Designing Approval Limits Across Entities
Approval limits should reflect the size and risk profile of each entity. A small trading subsidiary and a large manufacturing company should not share identical value limits. A tiered structure often works well:
- Tier 1: functional heads within an entity for routine, budgeted items
- Tier 2: entity CEO or director for larger or unbudgeted items
- Tier 3: subsidiary board for matters requiring board approval
- Tier 4: holding company management or board for group-material decisions
Build in segregation of duties so the person who raises a request is not the same person who approves and pays it. Avoid setting limits so low that every item escalates, which defeats the purpose of delegation.
Document the reasoning behind each limit. When auditors, lenders or new directors ask why a threshold was set at a particular level, a short rationale linked to budgets, entity turnover or risk makes the matrix easier to defend and update. Where an approver is absent, the matrix should name an alternate approver so that urgent decisions do not stall or bypass controls.
Making the DoA Matrix Work Day to Day
A matrix that lives only in a PDF is easy to ignore. Embed it into everyday systems wherever possible. Approval workflows in HR tools, such as the leave, hiring and payroll approval features in ATTPL WorkforceOS, can route requests to the right approver automatically.
Keep a regular review rhythm. Ongoing compliance management helps track statutory approvals alongside internal ones, and periodic testing by internal audit, as covered in our guide to internal audit for group companies, confirms that approvals actually follow the matrix.
Steps to Roll Out a Group DoA Matrix
- List current decision types and how they are approved today
- Draft limits by entity and role, aligned with budgets and legal requirements
- Get the draft reviewed by finance, legal and entity leaders
- Approve the matrix at the holding company board and adopt it at each subsidiary
- Train approvers and update system workflows
- Review the matrix at least once a year or after a major change
To design or refresh a delegation of authority matrix for your group, contact ATTPL HOLDCO and our governance team can explain how we can help.
Key takeaway: A clear delegation of authority matrix lets group companies decide faster without losing control, provided it respects legal approvals and is built into daily systems.
Frequently asked questions
Is a DoA matrix legally mandatory in India?
There is generally no single law requiring a DoA matrix, but it supports internal financial controls, and statutory board or shareholder approvals must still be followed.
How often should a DoA matrix be reviewed?
At least once a year, and also after restructuring, leadership changes, acquisitions or significant changes in business size.
Should every subsidiary have the same approval limits?
Not necessarily. Use a common structure, but adjust value limits to each entity's size, budget and risk profile.
Sources and further reading
This article provides general governance information and is not legal advice. Statutory approval requirements may change; consult a qualified professional for your specific situation.
