What is "authorized signature competence"? (business language)

Solution 1:

One of my longer answers: please be patient with me.

In the running of any legally constituted company or charity the question arises: who has authority to make legally binding contracts dealing with such matters as purchases and employment of staff, or to be responsible for the adherence to the law? - or to certify compliance with regulatory or quality standards - as in your question.

It is normal for these issues to be handled by a "scheme of delegation". Separate schemes may deal with finance, purchases, employment, regulation or certification. They have a common characteristic that the big decisions are handled by the senior people in the company and the smaller decisions are handled by staff lower in the hierarchy.

Without such a scheme, the legal force of agreements between the company and others is questionable, or the probity of the company is endangered. Those who are competent (=authorised) within the scheme to sign orders, agreements etc are acting as legal representatives of the company. Agreements made by others without signature competence are unlikely to be valid.

Here is an example from a part of the Scottish Government's general prescription of public schemes:

15.1 Purchasing authority No member of staff may award a contract without written delegated purchasing authority. This delegated authority to commit to a contract (purchasing authority) is entirely separate from delegated budgetary authority, including that detailed in individual financial responsibility statements.

15.2 Separation of duties In any procurement process, the key roles of budget holder and purchaser should not be performed by the same individual. The budget holder should have authority to commission goods, services or works and to provide financial authority for the expenditure. The purchaser should have authority to commit the organisation to a contract for the purchase of goods, services or works.

Scottish Procurement Policy Handbook. 15

and here is an example of a detailed part of a financial scheme of delegation:

University of the Highlands and Islands Financial Regulations

This example shows the monetary size of delegated authority at various staff levels. At the lowest level, staff may commit to orders less than £500. Only the university secretary has authority to authorise purchases above £25K. The secretary is the only person with authorised signature competence for these large purchases.

I have described a financial scheme but the same principles apply to schemes of certification and demonstration of compliance with the law and various standards.