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February 6, 2006
Policy clears up signature authorities

BY michael terrazas

Emory has formalized a policy specifying which University officers may enter into contractual agreements with vendors and other third parties, with the goal of standardizing such processes and eliminating any areas of ambiguity regarding who is and is not empowered to authorize such agreements.

Called the Signature Authority and Contracting Policy, the new guidelines codify what had been an unwritten interpretation of University bylaws, according to President Jim Wagner, and was created by a 19-person committee representing all corners of the University.

“Since we are a large and complex organization,” Wagner wrote in Jan. 15 memo, “Emory needs a clearly written and uniformly followed policy that will address questions such as this fundamental one: ‘Who can sign agreements, contracts and offer letters with external parties, as well as similar documents that commit University resources?’”

The new policy, which became effective Jan. 1, fits under the University’s continuing efforts to comply voluntarily with the applicable provisions of the Sarbanes-Oxley Act of 2002, a piece of federal legislation mandating certain governance practices in publicly traded companies. Specifically, the signature authority policy goes toward satisfying Sarbanes-Oxley’s requirement that entities establish uniform practices regarding the execution of contractual agreements with third parties.

“Continually improving our already strong governance standards is a high priority for Emory, whether the law requires us to comply with Sarbanes-Oxley or not,” according to Kent Alexander, senior vice president and general counsel, whose office has been instrumental in crafting the signature policy.

Emory’s bylaws—along with those of Emory Healthcare, The Emory Clinic, Wesley Woods, Emory Children’s Center and the Emory Medical Care Foundation, all of which are acknowledged in the new policy—explicitly grant signature authority to the president, the three executive vice presidents and other vice presidential positions. The new policy recognizes those empowerments while stating that the aforementioned officers also may delegate signature authority to others as they see fit (though the delegating officer retains ultimate responsibility for the actions of subordinates and any contracts they sign on behalf of the University). Officers who do not have signature authority, either explicitly through the policy or through a written delegation from their superiors, may not sign contracts with outside parties. Each dean of Emory’s schools and colleges has received a delegation letter from the appropriate executive vice president and will create sub-delegation letters as appropriate for the unique nature of his or her academic unit.

The policy also describes specific instances in which explicit signature authority is required regardless of prior delegations. For example, it states: “All contracts whose obligations or related financial exposure in excess of $250,000 … must be signed by the president or appropriate executive vice president(s) depending on the nature of the proposed transaction … unless otherwise delegated.”

Finally, the policy outlines a specific procedure through which signature authority may be delegated, including a sample form (such delegations must be made in writing), and stipulates that all University officers should review their delegations once a year (e.g., on Sept. 1) to ensure they are current, accurate and consistent with Emory’s needs.

“The University’s bylaws are quite broad; in some areas, they’re not very specific, and we were getting some questions from the field about what authorities people did or did not have concerning their ability to enter the University into contracts with outside parties,” said Mike Mandl, executive vice president for finance and administration. “This is meant to protect both individuals—by clearly delineating the authorities they have and the process by which they may delegate those authorities—and the entire institution.”

The signature authority policy was drafted by and is administered through the Office of the General Counsel. Anyone with questions regarding the policy should contact the office at 404-727-6011.

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