The Procurement Glossary » Procurement Governance

Procurement Governance

Strategy & Operations

Definition

The framework of policies, controls, roles and decision rights that direct and oversee procurement.

Explanation

Governance defines who can commit spend, how decisions are approved, and how compliance and performance are monitored. Strong governance balances control with agility, prevents fraud and maverick spend, and keeps procurement accountable to the organisation.

Example

Procurement governance requires competitive quotes above a threshold and a documented approval for every exception.

Related terms

• Procurement Policy — The documented rules governing how purchases must be made — thresholds, approvals, preferred suppliers and ethics.
• Delegation of Authority (DOA) — The formal policy defining who can approve spend and up to what value, at each level of an organisation.
• Segregation of Duties (SoD) — A control principle that splits critical steps among different people so no one individual controls a whole transaction.
• Policy Compliance — The extent to which actual buying behaviour follows the organisation's procurement policy.

Frequently Asked Questions

What is Procurement Governance?

The framework of policies, controls, roles and decision rights that direct and oversee procurement. Governance defines who can commit spend, how decisions are approved, and how compliance and performance are monitored. Strong governance balances control with agility, prevents fraud and maverick spend, and keeps procurement accountable to the organisation.

Can you give an example of Procurement Governance?

Procurement governance requires competitive quotes above a threshold and a documented approval for every exception.

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