Leading Boards N°1 Basics on Boards of Directors | Page 7
The structure of the Board of Directors is a key issue for good everyday governance . This involves the establishment of committees for managing the work load especially for large Boards . An important part of the decision making process and of the Boards work is done through these committees . Often committees are formed when the issues treated by the Board are too numerous or require special skills such as supervision on financial statements or compensation plans .
What is a committee supposed to do ?
A Board committee can deal with a specific matter or general issues and make recommendations to the Board for diligent decision making . Active committees meet regularly and make better Boards . Reporting necessary information and recommendations to the Board allows the Board to spend more time on strategic discussions .
How to establish a committee ?
The decision of forming a committee should be part of the agenda of a Board meeting . Discussed by the members , they must define a clear purpose and goals for each committee .
There are two sorts of Board committees :
• Standing committees : used for ongoing work such as an Audit committee , reviews the finances of the organization and relations with auditors ; a Governance committee , finds new directors and manages the organization of the Board ; and Compensation , studying the human resources , remuneration of the CEO or succession planning .
Board committees why , when and who ?
The structure of the Board of Directors is a key issue for good everyday governance . This involves the establishment of committees for managing the work load especially for large Boards . An important part of the decision making process and of the Boards work is done through these committees . Often committees are formed when the issues treated by the Board are too numerous or require special skills such as supervision on financial statements or compensation plans .
What is a committee supposed to do ?
A Board committee can deal with a specific matter or general issues and make recommendations to the Board for diligent decision making . Active committees meet regularly and make better Boards . Reporting necessary information and recommendations to the Board allows the Board to spend more time on strategic discussions .
How to establish a committee ?
The decision of forming a committee should be part of the agenda of a Board meeting . Discussed by the members , they must define a clear purpose and goals for each committee .
There are two sorts of Board committees :
• Standing committees : used for ongoing work such as an Audit committee , reviews the finances of the organization and relations with auditors ; a Governance committee , finds new directors and manages the organization of the Board ; and Compensation , studying the human resources , remuneration of the CEO or succession planning .