TESCO PLC DELEGATIONS of AUTHORITY - Private and Confidential - Our Tesco
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TESCO PLC DELEGATIONS of AUTHORITY Private and Confidential
Delegation of Authorities at Functional level
The Delegations of Authority (“DoA”) is a key element of the Group’s governance, and is
designed to support the business by requiring that, for decisions that incur financial cost to
Tesco, approval is provided by the right person or Committee.
The DoA comprises a list of common types of transactions, commitments, agreements and
expenditure incurred by Tesco, within Functional boundaries. The DoA has been approved
by the Tesco PLC Board and Executive Committee. Authorisation must be obtained before
any contract, agreement, commitment or spend has been made and evidence of such
authorisation should be retained – eg email confirmation.
Further Guidance relating to the DoA is available on the CoSec intranet site at:
https://tesco.sharepoint.com/teams/grouplegal/teamsites/groupcorporatesecretariat/Pages/Signin
g-Authorities.aspx
In addition to the DoA, (i.e. after authorisation of the spend has been made) consideration
should be given to the next steps under the Contracts and Signing policy and also the completion
of the purchase order. This is therefore a 3 step process – a) authorisation (DoA), b) the execution
and signing of the authorised spend in the contract/order (Contracts and Signing Policy) c) payment
through purchase orders (which are governed by finance systems).
Applying the DoA
Definitions:
Commitment: this is the anticipated total committed spend or value over the term of
the contract, not per annum. For example a 5 year contract with anticipated spend
of £100k p.a., the value for authority purposes is £500k. Unless stated otherwise, all
anticipated spend which is outside of plan will require approval under the DoA.
Ordinary Course of Business: the transaction is part of the usual or customary
practices that the Function is involved in: i.e. that Function’s usual business activities.
‘Ordinary Course of Business’ is used where the commitment does not fall under a
specific identified category within the Function’s DoA but does fall within the
Function’s budget or cost centre.
Cross functional spend: the transaction covers more than one Tesco Function. In this
situation, consideration should be given as to who is the budget holder / cost centre
and their Functional Approval authority levels. If appropriate, separate Functional
approval may be required.
Professional judgement
Your professional good judgement should be used where the transaction does not readily
translate into a category. You will need to bear in mind the need to consider the potential
risks to the Company and the need to do the right thing and work in a fair, open and honest
way in accordance with our values. If you are unclear on who needs to approve a
Commitment for your Function, please consult your manager or your Function Lead
regarding the terms on which your Function Lead has delegated the authorities within your
area. If you have any questions around the interpretation of the DoA, please consult your
Group Legal contact or the Company Secretary’s department before taking any action.
2Seeking approval
Where applicable, you should seek approval directly from the relevant approver in your
Function. Requests for Group CEO or Group CFO approval will usually be considered at the
next scheduled monthly Executive Committee or Group Finance Authority Board meeting
respectively. This should be considered as part of your project timetable. PLC Board
approval requests should be directed to the Company Secretary’s department.
3Product
Function
Lead and
Function Manager Manager Manager Manager
Commitments PLC Board Group CEO Channel Lead
Lead (WL5) (WL4) (WL3) (WL2)
as
appropriate
Any
contract Agree to Agree to Agree to Agree to
Contractual
Contractual Contractual over 1 year activity or activity activity or activity
obligation over
Goods Purchased obligation obligation 3 and price or price price or price
1yr
for Resale >3yrs and/or years < 1yr and £500m £500m>£250m contracts change to or change or change or change
£150m
£150m £1m £500m
4Channel (UK/ROI and International)
Commitments Group Group
PLC Board Channel Lead Manager Manager
(For spend outside of Plan) CEO CFO
(WL5) (WL4)
Deliver customer propositions
Contractual
and operations; large, All spend All spend
obligation >3yrs All spend £10m £10m>£1m
and/or >£500m £1m
and/or >£500m £15
£15m>£5m 5m £10m
£10m>£5People, Communication, Insurance, Transformation & Strategy
Function
Commitments PLC Board Group CEO Group CFO Manager Manager Manager
Lead
(WL5) (WL4) (WL3)
Performance
T&E, reward and management,
pensions, talent and reward framework
See ToR for
performance and policies,
Remuneration
severance All spend All spend All spend All spend
management, talent Committee and
structures £10m>£1m
All spendFinance
Commitments PLC Board CEO CFO
Treasury
Board Approval
Group Funding plan, including subsidiaries N/A N/A
required
Committed bank facilities,
Finance and
Commercial paper,
operating leases
Equity and Public Uncommitted bank facilities
Use of different funding options (inc. sales and
debt issuance Finance and operating leases
leaseback):
(inc. sales and leaseback):
maturity >5yrs
maturity £150m
(& advise Company Secretary)
issued share capital by a Group Company
Approval of external borrowing and tenor, not £250m>£125m,
>£250m £250m £250m>£125m 12 months) not included in funding plan
Changes to fixed/floating rate profile of Group (via
derivatives or underlying borrowings) or reset of >36 months £25m £25m>£10m
foreign exchange, commodities or energy £30m £30m>£10m £50m £50m>£10m £100m £100m>£25m.
tax payments
(Group General Counsel approval required to
Settlements £75m £75m>£10m £100m £100m>£25m
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