A Family Office Delegation of Authority Matrix You Can Actually Test

A principal says the CFO may approve routine spending. An LLC agreement reserves contracts above a certain amount to its managers. The bank portal lets an assistant release a wire. These are three apparent answers to an authority question, but they describe different powers. Until someone reconciles them, the office may approve a payment it cannot make—or make a payment that was never properly approved.

A family office delegation of authority matrix is a working index of decisions and actions, by legal owner and limit. This article builds four versioned decision entries that match a governing document, office policy and current bank entitlement, then tests what happens when those layers conflict. The matrix is an internal control; writing a name in a cell does not grant legal authority or change a bank mandate.

01What Does the Matrix Control?

The matrix answers a practical question before a person acts: for this legal owner, this type of decision and this exposure, who may recommend, approve, sign, execute and verify? It also says what changes when a threshold is crossed, a person is absent, or an interest must be disclosed.

The FOS governance guide explains how family recommendations become valid entity decisions. The org-chart guide separates management lines from approval powers. This article starts after those roles have been chosen: it puts each recurring authority question into a row people can use and audit.

Morgan Lewis describes a delegation matrix as a way to separate decisions retained by a principal, delegated within parameters to senior staff, sent to a committee and left to staff under policy. That is a useful structure. A family office also needs to know which entity owns the decision and whether its bank, contract and record systems allow the approved action.

1Write a row for a decision, not a job title

A usable row should record:

A decision threshold should use the full exposure relevant to that row. Splitting a five-year contract into annual invoices does not make it a small one-year approval. Whether related commitments must aggregate depends on the office's adopted rule and applicable documents; the matrix must state its rule rather than assume one.

02A Filled Matrix for One Fictional Office

The example below is a fictional, dated office fixture, not a model of legal authority. HoldCo LLC owns a direct-investment account and service contracts. Family Trust has its own trustee and account. On 1 October, the office compared copies of the documents named below with the current office policy and bank-entitlement report. The IDs are invented so a reader can see how the lookup works. The office's counsel and bank would need to establish the real documents' effect.

The matrix is presented as four decision cards so each entry can travel with its own roles and fallback. These are filled fictional records, not powers that a real office can copy without checking its documents.

1HoldCo vendor contract — delegated route

• Trigger and aggregation: Unrelated routine service contracts up to US$50,000 of total committed exposure, including priced renewals, options, amendments and termination charges. Fictional policy OP-v6 aggregates related statements of work for the same vendor and service program over the contract term; it does not reset the limit for each invoice or amendment. Unpriced exposure is unknown, never assumed below the limit.
• Authority and action: Managers' resolution HC-R7, effective 1 October, delegates the defined contract class to CFO Mara; signature list HC-S2 names her as signer. The service owner recommends; Mara decides and signs. Controller Ina independently compares final terms and aggregation against the approval.
• Substitute and status: HC-R7 names no deputy. Mara's absence means hold and escalate to HoldCo managers. Related-party suppliers, full exposure above US$50,000 or unknown exposure also leave this route and go to the two unconflicted managers named in HC-LLC-v4, subject to document-specific review. The ordinary route was checked 1 October; the 4 October proposal below is on hold.

2HoldCo private-fund subscription — manager route

• Trigger and source: Every new subscription, at any amount. LLC agreement HC-LLC-v4 requires the consent of two HoldCo managers for a new subscription; charter IC-v3 gives the investment committee a recommendation, not entity approval. Sources were checked 1 October.
• Authority and action: Investment team prepares the packet; committee recommends; managers Noel and Sol record the entity decision together. Noel signs under HC-S2 only after that decision. Ina checks final subscription terms and open conditions against the two-manager approval before signature. A later capital-call payment uses the separate payment route.
• Substitute and status: No alternate signer is established in this fixture. If Noel is unavailable or terms change, hold until a valid manager route or new decision is documented. A committee vote alone never activates the subscription.

3Family Trust distribution — trustee route

• Trigger and source: This class of beneficiary distribution, any amount. Trust extract FT-T5, checked with trustee Ada 1 October, reserves the decision to the trustee. Office policy OP-v6 assigns preparation to the CFO but no trust-asset approval power.
• Authority and action: CFO prepares the request; Ada decides and instructs under account mandate FT-B3; Ina independently checks beneficiary details and the dated decision without approving it herself.
• Substitute and status: No substitute trustee is established in the checked extract. Ada's absence or an ambiguous trust condition means hold for document-specific trustee review; the office does not substitute the CFO.

4HoldCo outgoing wire above US$25,000 — payment route

• Trigger and source: Payment policy PAY-v4 requires CFO approval after invoice or capital-call evidence and a current cash check. The underlying contract or investment must have its own approval. HoldCo account mandate HC-M3 names manager Noel for release; wire profile HC-P2 requires a different user to approve this outgoing wire type.
• Authority and action: Mara approves the payment; assistant Eli initiates; Noel releases; Ina independently verifies bank confirmation and ledger handoff. Corrected entitlement report HC-B9 confirms the account roles on 3 October. Bank permission does not approve the underlying obligation.
• Substitute and status: Report HC-B8 on 1 October wrongly allowed Eli both initiation and release, so the row was on hold. After the bank correction, fresh HC-B9, mandate HC-M3 and wire profile HC-P2 were checked; the row became active 3 October. There is no substitute payment approver in PAY-v4: Mara's absence still means hold even though Noel has bank release access.

The resolution, agreement and trust extract are assumed valid and current for this fictional opening state. A new version or conflicting interpretation changes the affected card to hold until checked. The bank reports record access, not the legal source of decision power.

Read the vendor and wire cards together. The CFO might approve a US$40,000 contract under a valid delegation, yet a payment above US$25,000 still needs the separate wire authorization and release controls. Conversely, bank access to release a US$40,000 wire does not establish that HoldCo approved the contract.

The investment-committee article owns the committee's mandate and voting method. The treasury article owns available-cash and settlement controls. The matrix references those jobs without replacing them.

03Test Absence, Conflict and a Changed Transaction

On 4 October, the CFO is away when a proposed US$44,000 first-year HoldCo service contract arrives. The deputy, Lee, offers to approve it. Resolution HC-R7 names Mara only and contains no substitute. The office records hold—Lee lacks verified substitute authority. COO Priya owns the escalation to HoldCo's managers by 5 October; Lee receives no approval task or shared login.

The vendor is owned by Lee's sibling. Lee records that interest under OP-v6 and does not review their own conflict. The matter goes to the two unconflicted HoldCo managers named in HC-LLC-v4, with counsel asked to check the related-party procedure before any approval. The relationship is a trigger under this fictional policy; its legal effect depends on the actual documents and law.

The contract also contains two automatic renewals and a termination fee. Only the first-year US$44,000 is priced in the submitted packet. The full exposure is unknown, not US$44,000 and not an assumed US$132,000: renewal prices and cancellation terms are missing. Priya asks the vendor for the complete schedule and the managers for a revised decision once it is known. Because HC-R7 excludes related-party contracts and the amount cannot be tested against its US$50,000 full-term ceiling, the CFO route would remain unavailable even if Mara returned that day.

The 4 October decision record therefore reads:

This is a hold-to-review path, not a finding that the managers must approve the contract. They may reject it, change terms or request more information. The office cannot declare “ready” until the actual route and conditions are confirmed.

04Match the Matrix to Documents and Bank Permissions

For every row, compare three layers before declaring it active:

1. Legal and fiduciary authority: the actual trust instrument, company agreement, resolution, power of attorney or other controlling record, as applicable. Local law and the documents can limit delegation; a generic chart cannot resolve that question.
2. Internal decision policy: the adopted thresholds, separation of duties, conflict procedure, substitute rule and record of approval.
3. Operational entitlement: contract signature list, bank account mandate, payment profile and system permissions. A portal role may be narrower or wider than the internal policy.

J.P. Morgan Private Bank's access guidance describes account-specific user permissions and configurable dual control for listed payment types. It also describes enrollment and setup conditions. Those details illustrate why an office must check the actual account's entitlements; they do not establish what another bank offers or whether an internal approval is legally sufficient.

The wire card records an actual hold on 1 October and a reactivation on 3 October. A user-permission change alone would not have been enough: Ina checked the current account mandate and the outgoing-wire profile too. For each future wire, Mara still must approve the payment and the underlying obligation must already have its own authority. The portal enforces access; it does not substitute for HC-R7 or PAY-v4.

Keep an exception log for mismatches. If a former employee retains bank release access, remove or suspend it through the bank's process and record confirmation. If a newly authorized substitute lacks access, do not share credentials or treat a manager's email as a bank entitlement. If the bank mandate lists a person no longer empowered by the entity, reconcile the documents and account setup before that person acts.

Review the matrix when an entity, trustee, officer, bank account, committee charter, policy threshold or service provider changes, and on a scheduled cycle. Record the effective date and source version for each row so staff do not follow an old authority path after an amended instrument or resignation.

05The Five-Question Release Test

For a real proposal, the decision packet should let a reviewer answer these questions without interpreting a job title:

1. Who owns it? Name the entity and account, not simply “the family.”
2. What is the full action? Include total commitment, term, contingent amounts, beneficiary and changes since approval.
3. Who can decide and act? Identify the current mandate, approver, signer, executor and independent check.
4. What changed the normal route? Record absence, conflict, threshold breach or a condition left open.
5. What proves completion? Link the dated approval, signed instrument, bank confirmation where relevant, and follow-up record.

The answer can be ready, ready only after named conditions, or hold. An unknown source document or permission is a hold with an owner; it is not an implied approval. That makes the matrix useful when the principal is away, a decision crosses entities, or a deadline is close—the moments when an office is most likely to rely on memory.