Approval Policy

An Approval Policy (Attestant Rules) in a startup refers to the internal framework that governs how decisions, financial transactions, contracts, and other critical actions are authorized. This policy ensures accountability, transparency, and adherence to regulatory or corporate governance requirements.

Key Aspects of an Approval Policy in a Startup

  1. Authority Levels & Decision-Makers
    o Defines who has the authority to approve financial transactions, business agreements, hiring, and strategic decisions.
    o Typically includes founders, executives, board members, or department heads.
  2. Approval Limits & Escalation Rules
    o Specifies thresholds for different types of approvals (e.g., expenditures above a certain amount require executive sign-off).
    o Outlines who must approve and when escalation is required.
  3. Attestation & Documentation Requirements
    o Ensures approvals are formally recorded (e.g., signatures, email confirmations, or electronic approvals).
    o May require witnesses or multiple attestants for key decisions.
  4. Financial Approval Policy
    o Covers budget allocations, expenses, investments, and loan approvals.
    o Often linked to a spending limit per role (e.g., managers can approve up to X amount, CEOs have unlimited approval power).
  5. Contract & Legal Document Approval
    o Governs the approval of contracts with clients, vendors, investors, or employees.
    o Ensures legal review before agreements are finalized.
  6. Operational & HR Policies
    o Covers approval of new hires, promotions, salary changes, or employee benefits.
    o Ensures compliance with labor laws and company regulations.
  7. Compliance & Regulatory Approvals
    o If applicable, defines who ensures government filings, tax submissions, and regulatory compliance.
    o May involve external auditors or legal advisors.

Why an Approval Policy Matters for Startups

  • Prevents Unauthorized Transactions – Ensures funds and contracts are approved by the right stakeholders.
  • Increases Accountability – Documents who approved decisions, helping resolve disputes.
  • Improves Efficiency – Streamlines processes by clarifying decision-making roles.
  • Boosts Investor Confidence – Investors prefer startups with structured governance and accountability.

Written by Swedish Ventures, Rolf Olsson. Remarks to this article could be sent to glossary@swedishventures.se

ASO: DD-03-13