Approval Matrix

An approval matrix — sometimes called a delegation of authority or authorization schedule — answers one foundational question: who is allowed to say yes to what? It maps out every significant category of financial decision (wire transfers, vendor contracts, investment commitments, capital expenditures, hiring) and assigns approval authority by role and by size. A staff member might approve routine vendor invoices below a certain illustrative threshold, while larger disbursements require the CFO, and anything above a higher illustrative threshold requires a family principal or the full investment committee. The matrix makes those rules explicit, consistent, and auditable.

Without a written approval matrix, authority tends to be informal and inconsistent — different people make different calls, and there is no clear record of who authorized what. This creates both operational risk and governance risk. If a dispute arises or an auditor asks why a payment was made, the office needs documentation showing that the right person approved it under the right authority. The approval matrix is that documentation's foundation, and it belongs at the center of the office's governance structure.

Families typically revisit and update the approval matrix as the office grows, as family principals transition roles, or as new asset classes or entities are added. A three-generation family with two operating businesses might have a significantly more complex matrix than a single-founder office, because more people hold legitimate authority over different parts of the enterprise. The matrix also works hand-in-hand with dual control requirements: certain categories may require two approvers regardless of amount, which the matrix makes explicit.