Governance · Ownership · Component
Owners’ mandate
The owners’ expectations of the business in writing — return, horizon, boundaries and dividend policy — handed to the board as its brief.
The deliverable
What it is
In Nordic practice this is often called an owner strategy; in family firms it may sit inside a family charter. Whatever the name, it states what the owners want from the business, so that the board does not have to infer it from remarks at the annual general meeting.
It is short, and it is the owners’ document, not management’s. Management proposes strategy; the mandate sets the frame that strategy has to fit. The risk appetite set under Enterprise risk is derived from it, and a board that finds the two in conflict goes back to the owners.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
Return and horizon
The return the owners expect, over what period, and whether they want it as dividends, growth in value or both.
3 attributes: Target return · Horizon · Dividend policy
LearnBoundaries
What the owners will not have the business do — activities, markets, ownership changes or levels of debt they rule out.
3 attributes: Boundary · Reason · Debt ceiling
LearnAdoption record
Which owners agreed the mandate, with what share of the votes, and when it is next due for review.
4 attributes: Adopted · Votes in favour · Next review · Version
Learn
Management proposes strategy; the owners set the frame it has to fit. A board without a mandate tends to adopt management’s plan as the owners’ wishes.
The other components in ownership
Ownership register
Who holds what in the business, including options and instruments that will become shares, reconciled to the statutory record.
LearnShareholders’ agreement
The rights and obligations between owners beyond what the articles provide — consent matters, transfers, leavers and deadlock.
Learn