Canonical definition
What are decision rights?
Decision rights are the explicit assignment of who decides what, who is consulted, who informed, and who can veto. The four-role model (decide, consult, inform, veto) covers most cases. Decision rights are a governance tool that makes implicit power explicit. Their absence produces decision concentration; their presence releases it.
In one sentence
The written record of who carries each decision in a company.
What it actually does
Decision rights work across four named roles:
- Decide. The person whose call closes the decision. There is one decide-role per decision.
- Consult. The people whose input must be heard before the call is made. Their opinion is mandatory; their agreement is not.
- Inform. The people who must be told once the decision is made. They do not block the call; they need the news.
- Veto. The people who can stop the decision regardless of the decide-role's preference. Often the board, a co-founder, or a regulatory function.
What it is not
- Not the same as RACI. RACI tries to capture four things at once and usually obscures the deciding question. The four-role decision-rights model isolates who decides as the single most important fact.
- Not the same as org chart. The org chart describes reporting lines. Decision rights describe deciding lines. They overlap but are not identical.
- Not the same as approval workflow. An approval workflow is a procedure. Decision rights are a structural fact upstream of the procedure.
- Not optional for serious decisions. Implicit decision rights produce conflict. Explicit decision rights produce decisions.
- Not a one-time exercise. Decision rights are a living document that updates when authority transfers, roles change, or governance shifts.
Three short examples
Example 1
The pricing decision that was three decisions.
Pricing seemed to belong to the head of sales. The decision-rights review showed it actually involved sales, finance, and the founder, with no named decider. Pricing decisions had been re-litigated for nine months.
Example 2
The hire that needed a veto.
An exec hire was made by the COO. The board, who held veto rights on senior hires per the operating agreement, was not consulted. The hire was reversed three months later at significant cost.
Example 3
The exception that escalated to the founder.
A manager-level discount request escalated to the founder because the manager's exception authority was unwritten. After the rights were named, the manager closed similar decisions in hours.
When to use it
Name decision rights when:
- The same decision is being re-litigated in different meetings.
- Senior hires have failed because they did not have the rights the role suggested.
- Investors or board members have entered and the historical structure no longer fits.
- The founder is the bottleneck and the cause is unclear authority, not lack of trust.
- A cross-functional decision keeps stalling.
Skip the formal exercise when:
- The team is below ten people and authority is naturally clear.
- Decisions are closing fast and the pattern is healthy.
- The framework would be performance, not structural change.
Common questions
- How is the four-role decision-rights model different from RACI?
- RACI uses four letters (responsible, accountable, consulted, informed) but in practice the responsible/accountable distinction confuses teams. The four-role decision-rights model uses decide, consult, inform, veto, which is sharper.
- Where should decision rights live as a document?
- In the governance binder, the operating manual, or the equivalent of a company wiki. It must be readable in five minutes by a new exec hire.
- Does every decision need named rights?
- No. Decisions below the discretion threshold of each role do not need named rights. Decisions above that threshold do.
- Does the board hold veto on every decision?
- No. The board holds veto on the decisions named in the operating agreement or shareholder agreement. Naming those decisions explicitly is part of the decision-rights work.
- Who builds decision-rights documents for private businesses?
- Stan Tscherenkow's private advisory reads the existing authority pattern, surfaces the gaps, and names the decision rights as part of an engagement on governance, founder bottleneck, or capital event.