Mandate

A mandate is the set of institution-specific facts that determine whether a given position fits an institution's current capital plans: its risk appetite, its existing portfolio concentration, and the capital it actually has available to deploy in a given period. A prediction model can state what has historically happened to comparable matters, but it has no visibility into an institution's mandate and should not be built to substitute for it, because collapsing mandate-level judgment into a model's own output would require the model to make decisions about the institution's risk posture that only the institution itself is positioned to make. This is the specific reason a human decision belongs at the point a structured model output becomes a capital commitment, in an otherwise automated, rules-based pipeline: the mandate is the layer of judgment the pipeline was deliberately built to stop short of. Automating a commitment decision past a fixed threshold does not remove the mandate from the process; it relocates the mandate's application to whoever set the threshold, at whatever point in the past they set it, without the accountability a named decision-maker carries at the moment of an actual commitment. An institution evaluating its own governance should be able to state, for any position, whose mandate-level judgment was actually applied and when.