This service is a core module of China Compliance Risk Review™, designed to support the overall compliance infrastructure for China operations.
In China, many risks do not arise from wrongdoing — but from the absence of clear authority.
In many foreign-invested enterprises, governance structures exist on paper: boards, managers, policies, and authorization documents.
Yet when questioned by auditors, regulators, or headquarters, the real issue often becomes:
Who had the authority to make this decision — and on what basis?
The Governance & Authorization Framework addresses this structural ambiguity.
Why Unclear Authorization Is a Structural Risk
Common high-risk situations include:
De facto decision-making power concentrated in local management
Authorization boundaries based on informal understanding
Headquarters informed only after decisions are made
Inconsistent explanations of similar decisions
Such issues may not surface immediately, but they create significant explainability risk when reviewed retrospectively.
Key Areas We Assess
1 | Decision Layers and Authority Boundaries
Which matters fall under local operational authority
Which require HQ or board-level approval
Whether gray areas exist in authorization design
2 | Practicality of Authorization Design
Whether authorization documents are usable in practice
Whether actual decisions align with written authority
Whether authorizations exist only in form, not function
3 | Governance Logic of Key Roles
Clarity of responsibilities among directors, GM, and finance
Whether excessive power concentration exists
Whether authority depends on individuals rather than mechanisms
4 | HQ Involvement and Traceability
Whether HQ participates in key decisions proactively
Whether decision paths are documented and traceable
Whether decisions can be reconstructed under review
Common but Underestimated Risk Scenarios
Broad authority granted for efficiency without boundaries
Authorization structures not updated as business evolves
Decisions made via informal communication without records
Personnel changes leaving historical decisions unexplained
The risk lies not in the decision itself, but in the inability to defend it later.
What This Module Is Not
This module does not include:
Internal control implementation
Policy drafting or execution
Internal audits or investigations
Legal opinions or governance certifications
It is a governance and explainability-focused assessment, not an execution service.
What You Will Receive
Governance and authorization risk assessment
Identification of unclear or high-risk authority areas
Evaluation of explainability and traceability
An executive-level governance summary for HQ
Position Within China Entry + Governance Package
This module:
Follows entity setup and legal structuring
Supports seal, contract, and payment control design
Directly contributes to HQ explainability and long-term governance
In China, governance risk often arises not from excessive authority, but from authority that was never clearly defined.
We do not make decisions for you; we only help you clarify facts and risks.
Phone : 400 800 7472
Email : info@rtfcpa.com
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