Delegated Authority Policy

Scope

This procedure applies to all personnel. 

Purpose

To define authorities delegated from the directors of ImpediMed Limited to board committees and to management to make decisions binding the company.

To clarify powers that are reserved to the full board of directors.

To ensure that all personnel understand their authority levels, and know where to go for approval on resource and expenditure decisions.

Reference Documents

Source Documents:
ASX Corporate Governance Principles – Principle 1 – Lay solid foundations for management and oversight.     

Responsibilities

Finance Department:
Ensure when processing payments that approvals as required under this SOP have been attained.

All Employees:
To ensure prior to making any commitments on behalf of the company with legal or financial implications that those commitments are properly authorised within the framework for delegation of authority that has been approved by the board of directors.

Abbreviations, Acronyms and Definitions

Employee:
A full time or part time employee of ImpediMed.

Employment Levels:
Each employee has a designated employment level which is used to define the authority level of their position.

Currency:
All currency values in this document are expressed in US dollars, which is the currency in which a majority of the group’s transactions are conducted. When transactions in other currencies are subject to this policy, the values at the time of a decision will be determined using the exchange rate for that day as recorded on www.oanda.com

Procedure

Strategic Plan:

The Board delegates responsibility for the creation of the Company’s Corporate Strategic Plan to the CEO in conjunction with the CEO’s management team. 
The CEO will work through an iterative process with the board on refining management drafts with input from the board.

The approval of the Company’s Corporate Strategic Plan is the responsibility of the Board.

Business Plan and Budget

The Board delegates the preparation of the Company’s business plan to the CEO in conjunction with the CFO and the management team.

This document is produced annually to define the key operating objectives for the Company’s business, and to outline the plans to achieve those objectives, including operating budgets and resourcing requirements.

The approval of the Company’s business plan, operating budget, and resourcing projections is the responsibility of the Board.

Management of Overhead Costs

The management and authorisation of overhead costs is delegated by the Board to the CEO and management team. The CEO and CFO are responsible :

     to authorise appropriate operating activities that support the generation of sales revenue that will meet or exceed budget.

     to create and manage processes with the CFO and management team to manage overhead costs against approved operating budgets 
     that have been approved by the board of directors.

     where overall overhead costs are authorised by the CEO and CFO  to exceed approved operating budgets, to ensure that monthly reports to 
     the board explain the reasons for key variances including the benefits that support the authorisations.

The board is responsible for supervising the reporting of operating costs against budget. 

Authority Levels

Following is a table that outlines the organisational levels framework which defines the authority level an employee has in the organisation. Each employee’s position description will define the level of the employee’s position :

Level One	CEO
Level Two	CFO, COO, and Executive Vice Presidents
Level Three	Senior Vice Presidents, Vice Presidents, and Controller
Level Four	Senior Directors
Level Five	Directors and Senior Managers
Level Six	Managers and Senior Professionals
Level Seven	Professionals and Senior Functional Staff
Level Eight	Functional Staff

When applying approval limits anywhere in this policy, commitments resulting in multiple payments, either over time, or for sub sections of something that really represents a whole must be grouped together. Any attempt to artificially break up a spend into separate payments to avoid escalation of an approval decision or get around approval limits will be viewed as misrepresentation.

Operating Expenditures, Materials and Product Purchasing

The Board’s prime control over purchasing for operations is via the approval of operating budgets, and the reporting of operating costs. Therefore the board delegates the oversight of a purchasing policy and process for items excluding capital expenditure to the CEO and CFO, with that policy to be administered by the executive who manages operations.

The table below outlines required approvals for purchasing and expenditures including research and development projects, manufacturing materials and product for resale, excluding capital expenditure. Purchasing of materials for manufacturing and product for resale should be managed through this policy in conjunction with the most current supply chain forecasts.
The purchase amounts in the table exclude GST (which is recoverable by the business) and includes Sales Tax (which is a cost to the business):
 

Purchase Amount	First Minimum Authority Level	Second Minimum Authority Level
Up to $1,000	Manager & Senior Professional	Senior Director
$1,000 to $5,000	Manager & Senior Professional	Senior Director
$5,000 to $20,000	Senior Director	Vice President or Controller
$20,000 to $50,000	Vice President or Controller	COO or CFO or SVP
$50,000 to $100,000	COO or CFO	CEO
$100,000 to $250,000	CEO or COO or CFO	Chairman
Greater than $250,000	The Board of Directors	The Board of Directors

In addition to the requirement for employees approving operating expenditure to meet the level cutoffs outlined above, at least one of the authorising employees must be responsible for the organisational function for which the purchase is being made. The CEO, COO and CFO are deemed to have organisational oversight for all functions.

Capital Expenditure

Purchasing of Capital expenditure is approved through a separate process from operational purchases. By nature, capital expenditures are not as routine as operational expenditure, requiring greater oversight and the maintenance of an audit trail demonstrating appropriate scrutiny of expenditure.

The Board defines the delegated authorities and the level of required audit trail documentation with respect to capital expenditure as follows:
 

Purchase Amount	First Minimum Level Authority	Second Minimum Level Authority	Audit Trail Documentation
$2,500 to $5,000	Manager and Senior Professional	Senior Director	PO
$5,000 to $20,000	Senior Director	Vice President or Controller	PO, Capex Form, & Proposal
$20,000 to $50,000	Vice President or Controller	COO or CFO or SVP	PO, Capex Form, & Proposal
$50,000 to $100,000	COO or CFO	CEO	PO, Capex Form, & Proposal
$100,000 to $250,000	CEO or COO or CFO	Chairman	PO, Capex Form, & Proposal
Greater than $250,000	The Board of Directors		PO, Capex Form & Proposal

Proposals for capital expenditure should be sufficiently detailed to explain the rationale for proceeding with a purchase, the analysis undertaken in considering alternatives, and where one can be meaningfully calculated an NPV calculation of the investment and resulting cash flows. Proposals should consider any implications for Occupational Health and Safety and the company’s quality system.

Disposals of capital equipment should be subject to the same level of approval as purchases, with the original purchase price of the item determining the level of approval required. Items sold should be recorded with a miscellaneous invoice to a receivable account before the item leaves company premises, and this includes items donated which would be recorded on a zero dollar invoice.

Disposals of capital equipment by scrapping should be recorded on a capital equipment disposal form and approved in accordance with the same levels as apply to purchases, and using the original purchase price of the item to determine the level of approval required.

Bank Payments

All primary bank accounts shall be subject to two signatories to sign jointly.

Where a company office is frequently without two signatories present, the board may approve the opening of a special bank account with a balance not to exceed $20,000 which is subject to one signatory.

The board delegates authority to the CEO to appoint trusted staff at level 5 or above as signatories for the company on its bank accounts.

Bank signatories shall not include staff whose primary functions include invoicing, credit notes, the processing of cash receipts or cash payments, or bank reconciliations.

Headcounts & Staffing

The Board delegates authority to the CEO and CFO to appoint new staff in line with the approved business plan and operating budgets.

In the event that new staff appointments need to be made in advance of budgeted increases the CEO and CFO will circulate an advice of the intention to make an unbudgeted appointment at least 48 hours prior to finalising an offer of employment.

With respect to Executive level appointments for positions reporting to the CEO, the Board or a smaller group of directors nominated by the Board will participate in the selection and appointment process.

Agreements and Contracts for the Supply of Goods and Services

All agreements or contracts must be recorded in the company’s agreement register.

Any staff involved in negotiating an agreement or contract or its renewal will involve the CFO or the contracts administrator in the review process prior to finalising the contract ready for signature, such that any changes considered necessary by either can still be incorporated.

The Board reserves authority to approve the signing of any contract or agreement to acquire any entity, business, or piece of technology or intellectual property which the Board considers significant. Significant is defined as an agreement or contract greater than one year and greater than $100,000. Following Board approval recorded in a Board minute, any two directors may sign the agreement binding the company.

Distributor agreements are in the ordinary course of business. The Board delegates authority to the CEO, COO, or CFO to enter into distributor agreements either to engage a distributor, or to act as a distributor for another company.

Original Equipment Manufacturers (OEM) agreements to put the ImpediMed brand on the product of another company, or to allow another company to put their brand on ImpediMed product are considered strategic decisions that require board review and discussion prior to commitment. Thus the board reserves authority to approve OEM agreements. Following Board approval recorded in a Board minute, any two directors may sign the agreement binding the company

Any standard ImpediMed approved agreements the form of which has been approved by the CEO or COO and CFO once approved and finalised for use through the company’s quality system may be executed by the Contracts Administrator, or by a person who has been approved in writing by the CEO or CFO to sign off that type of agreement.

Non standard agreements other than as described above should be approved for signing in writing by the CEO or COO and CFO, who may at their discretion delegate the physical signing of the agreement so long as the commitment is no longer than three years and for a total dollar commitment of no more than $50,000.

Where non standard agreement could be considered by a reasonable person as potentially significant to the Company, the CEO, COO or CFO should communicate with the chairman of the Board to discuss the agreement prior to signing. If the agreement exceeds a one year commitment, and exceeds a dollar commitment of $100,000 it would be presumed to be significant. If the chairman of the Board feels that the agreement requires board input or discussion, the chairman of the Board and CEO will agree a course of action to seek board input to the agreement on a timeline appropriate to the circumstance, using email communication and circulating resolutions where necessary.

Litigation Claims and Commercial Disputes

Approval by the Board or designee is required prior to settling any litigation claims (including any administrative proceeding in front of a governmental/regulatory agency) or commercial disputes.