A director’s vendor proposal tests delegation
A board member asks the chief executive to sign a technology contract with a company owned by the member’s business partner. The director says the product will improve service and that the board will probably approve later. The association’s current policy requires an identified evaluation process for this size of commitment, and the chief executive’s delegated authority does not cover the proposed term. Several staff members have concerns about data export and exit provisions. The vendor offers a limited-time discount, and a public product launch has not yet been announced. The board has an established conflict-management process, but the relationship has not been disclosed through it.
1. What should the executive establish before commitment?
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Clarify authority, apply the procurement and conflict processes, and assess the actual requirements and contract risks. A director’s individual request and a temporary discount do not substitute for the required approval or a defensible evaluation.
2. Which operating concerns belong in the evaluation?
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Assess service needs, data ownership and usable export, performance commitments, transition and termination. Document the relationship and decision so future leaders can understand both the selection and the obligations being accepted.