ICANBusiness, Management and FinanceManagement Theories and Functions2021

Under the Companies and Allied Matters Act (CAMA) 2020, the Board of Directors of ABC Manufacturing Plc resolves to delegate certain operational decisions to the Managing Director. The Managing Director subsequently sub-delegates some of these decisions to departmental heads. According to classical management principles, which of the following statements is correct regarding this arrangement?

AResponsibility can be fully delegated and the MD is absolved of accountability once sub-delegation occurs
BAuthority can be delegated but ultimate responsibility and accountability remain with the delegating managerCORRECT
CSub-delegation is not permissible under any management principle unless expressly authorised by statute
DDelegation of authority automatically transfers ownership of decisions to the subordinate permanently
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
A fundamental principle of delegation in management is that while authority can be delegated downward, ultimate responsibility and accountability cannot be fully transferred — the delegating manager remains accountable for the outcomes of delegated tasks. This is consistent with classical management theory and is also reflected in the fiduciary duties of directors under CAMA 2020 (Sections 305-308), which hold directors accountable for the company's affairs regardless of delegation. Options A, C, and D misstate the principles of delegation.
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