Who Should Have Authority to Approve Investments of Different Sizes?

Set approval authority in writing, then match it to the investment and its risks. In my experience, a family office works better when everyone knows who can recommend a deal, who can approve it, and who is responsible for carrying it out. The family should decide those boundaries before a time-sensitive opportunity arrives.

Build an Approval Structure

Start with the family's investment mandate and governance rules. Specify which decisions belong to the family, the investment committee, the chief investment officer, or other staff. A practical policy can let investment staff make routine decisions inside an approved allocation, while requiring committee review for a new strategy, a material commitment, or an exception to a limit.

Use more than dollar size to determine the approval path. A relatively small investment can carry unusual legal, operational, reputational, or concentration risk. A larger allocation to a familiar, well-understood strategy may fit a preapproved plan. Set thresholds that prompt review, but also list the circumstances that require escalation regardless of size.

Keep Recommendations and Approvals Clear

For each level, document who prepares the analysis, who reviews conflicts, who votes, and who signs the final instruction. The person recommending an investment should not be assumed to have approval authority. Record any limits on a staff member's authority, including the maximum commitment, permitted asset types, and whether follow-on funding needs a fresh decision.

When a family office approves an outside manager, it can also set a limit on how much capital it will place with that manager. That helps avoid having too much exposure to one fund or being affected by fund restrictions. Approval of the manager and approval of the amount are related, but they are separate decisions.

Make the Process Usable

Speed comes from agreed procedures, not from skipping review. Give staff a standard memo format and a clear route for urgent decisions. State who can call a meeting, what information is needed, how members register a conflict, and how an approval is recorded. If a decision falls outside the mandate, pause the commitment and bring it to the authority named in the policy.

Review the structure as the family's assets, team, and investment activity change. A family compass can help align authority with shared priorities, while a written governance policy clarifies who controls allocations and other decisions. The family can also use its investment committee to review limits and confirm that delegated authority still fits the portfolio.

For a broader framework, see single family office governance, investment committees and advisory boards, creating your family compass, and making investment decisions quickly with proper review.

What powers and real decision-making authority will the CEO or president of the single family office have, particularly if that person is not going to be you?

Sources: The Family Office Book, The Single Family Office. Informational only, not financial, legal or tax advice.