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Q&A with Governance Institute

Many organisations use powers of attorney (POAs) to carry out a range of business as usual activities. How do you determine the optimum number of years for the POA which balances appropriate risk management with the operational efficiency of not having to renew POAs frequently?  

Many organisations use powers of attorney (POAs) to carry out a range of business as usual activities. How do you determine the optimum number of years for the POA which balances appropriate risk management with the operational efficiency of not having to renew POAs frequently?  

May organisations use POAs to carry out a range of activities and practices, particularly in the financial services sector. How they are used will depend on the needs of an individual organisation. One thing to remember is that if a POA is in favour of a particular individual it will need to be updated if they leave the business for whatever reason. Some organisations take a different approach and grant POAs to named organisational roles. If implementing this approach, it is important to make sure the POA is not affected by a restructure or a change to of role title. Some larger organisations with many international subsidiaries may not use POAs but have an internal policy authorising certain individuals or roles to execute documents using Adobe Sign without a power of attorney. Where there a number of ‘low risk;’ documents for execution this can be a more efficient process rather than requiring all documents to be executed by senior executives. It is also important to be aware of the scope of any POA. It is useful to review any powers granted at the same time as financial delegations are reviewed, often annually. Regular review is also important where powers are delegated to the holder of a particular role in an organisation. 

I work in an organisation with a number of different entities where there are common board papers across the group. Is it preferable to disaggregate the papers? 

The most important issue is ensuring that directors have access to the information they need to make decisions for each individual entity. It is therefore important to consider how to do this efficiently, so that directors are not reviewing the same paper multiple times. Where there are multiple common documents one approach is to use a link to the other document, which effectively disaggregates the documents but maintains a common reference. These types of issues often arise where there are regulatory requirements such as modern slavery and anti-money laundering program reporting and information. In these cases the papers can be drafted so that it is clear to directors that it is a duplicate document. Alternatively a hyperlink to any common documents can be used. 

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