Holding a governance token does not always mean that the holder is the account exercising its votes. Delegation can concentrate voting authority in another address while token ownership remains elsewhere. For an institution, that creates a mandate to manage: who may act, on which decisions and under what conditions the authority can be withdrawn.
OpenZeppelin's governance documentation describes voting units, delegation and historical checkpoints. It also documents governor components with different parameters and execution arrangements. These are building blocks, not a description of every deployed protocol. Diligence must establish the actual implementation and configuration used by the institution's token.
Confirm how votes become active
Some implementations require delegation, including self-delegation, before a balance contributes active voting power. Other systems use different mechanisms. Read the token and governor contracts together, then verify the result for the specific holding account. A custody statement showing tokens does not prove that the expected votes are available.
Record when voting power is measured. A proposal may use a past snapshot rather than the balance at the moment a vote is cast. This affects whether a new delegation or token transfer can change authority for that proposal. Operations staff should know the relevant clock, snapshot and deadline before a decision reaches the voting stage.
Write a decision mandate
The investment team should distinguish routine parameter decisions from changes that affect fundamental exposure. A delegate might be permitted to vote on administrative proposals but required to consult on treasury spending, contract upgrades or changes to collateral eligibility. The policy should define those categories in language a delegate can use.
A hypothetical mandate might require notice before supporting a proposal that changes liquidation parameters on assets the institution holds. That is a governance control, not a claim that such notice is enforced by the protocol. If the arrangement depends on an offchain agreement, describe the agreement and its remedies separately from the onchain delegation transaction.
Examine conflicts and incentives
A delegate may receive compensation from a protocol, work for a service provider or hold a position affected by a proposal. Ask for relevant disclosures and define how conflicts are handled. An address's voting history can show participation, but it cannot explain every relationship behind the decisions.
Assess capacity as well as incentives. Someone who understands a protocol may still miss votes or rely on others for technical analysis. Require evidence of proposal review, escalation and continuity. Our article on who controls a protocol provides the broader power map; a delegation review focuses on the authority entrusted by a particular holder.
Verify the revocation path
An institution needs to know which wallet can change delegation, what approvals that wallet requires and how long the process takes. Test the sequence before an urgent proposal. A policy promising immediate revocation is weak if custody operations require several business days or the relevant signer is unavailable.
Revocation may affect future voting power without altering a proposal's already established snapshot. Confirm the specific behaviour rather than promise that changing a delegate can undo any unwanted vote. Keep a record of the transaction, effective point and proposals for which the previous delegate may still have voting authority.
Monitor the authority, not just participation
A monthly report should connect proposals, instructions and recorded votes. Identify abstentions, deviations from the mandate and votes cast after an internal escalation. Review delegation concentration as part of the institution's exposure: several nominally separate delegates could depend on the same organisation or decision process.
Execution deserves separate attention. Passing a proposal may lead to a timelock, further transactions or actions by a privileged operator. The institution should understand the path from voting result to implementation before treating a vote as the final control. Review transaction payloads and upgrade effects where the proposal requires them.
For a protocol-builder context, Stani Kulechov's speaker profile is a relevant archive entry. A usable delegation policy combines a technical map with a human mandate and an executable exit route. Its purpose is to ensure that the voting authority attached to an institutional position remains accountable, including when a decision is contentious or time-sensitive.