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Productive committees help boards function better.
A company’s board of directors accomplishes a lot of its goals through the work of various committees. Committees help boards work most efficiently and productively by dividing the workload and giving the board the flexibility it needs to adapt to new challenges. They use the specific experiences of the board members to inform board strategy (i.e., a financial advisors and accountant are good fits for the finance committee.)
What is a committee?
Committees can be made up of one of more people and are generally subsets of the board of directors. They focus on more specific topics than the full board and are an efficient and practical way to organize board business and keep it moving forward.
A committee’s role is primarily advisory—they’re created to provide insight, information, and advice to the board, to help the board make the most well-informed decisions. The committee can recommend actions to the board, but the board is not obligated to follow the committee’s recommendations.
Who Serves on Committees?
Current board members, employees, and volunteers can all serve on committees, and the size of the committee depends on what they need to accomplish.
Since it’s the committee’s responsibility to gather all the data and then distill it down to the information that the board needs, sometimes the committee needs to rely on outside experts. Some boards invite outside experts with specific knowledge to join their committees, ensuring that they have all the relevant information they need to advise the board on the best strategy. Bringing in outside experts helps keep the board perspective fresh.
What is a Standing Committee?
Committees that boards use on a regular basis are called standing committees (or operating committees). They meet regularly, and function as general business management/operations committees. The most common kinds of standing committees are finance, executive, fundraising/development, governance, and nominating (sometimes the governance and nominating committees are combined). A standing committee evaluates the performance of the company as it relates to the committee’s specific function.
What is a Task Force or Ad Hoc Committee?
Some boards don’t have any standing committees. Instead, executive leadership appoints task forces or ad hoc committees as needed for short term, non-recurring projects, like capital campaigns. Creating task forces and ad hoc committees allows the full board to focus on the more impactful, strategic decisions that have short- and long-term effects on the business. Unlike standing committees, task forces and ad hoc committees are temporary—once the project is completed, the task force is disbanded.
Zero-Based Committee Structure
Some boards even end each year by terminating all committees. Like a zero-based budget, only the necessary boards are carried over to the next year. This practice ensures efficiency by eliminating committees that are no longer needed.
What are the Different Committee Roles?
The size and structure of committees depend on its goals. The committee’s structure and the roles within the committee vary by organization, and they’re usually outlined in the company’s bylaws.
Traditionally, committees consist of the following roles:
President. The president provides leadership and direction to the committee. Also called the committee Chair, the president is responsible for ensuring the committee achieves its objectives. Other responsibilities of the Committee President include
- Steer committee meetings to ensure that they’re efficient and productive.
- Make sure everyone is fulfilling their individual responsibilities.
- Act as a signatory for the committee.
- Ensure the committee is focused on good corporate governance.
- Communicate regularly with the board.
- They’re the primary spokesperson for the committee.
Vice President. The Vice President supports the president in their role. They perform the duties of the president when the president is unable to do so They’re often next in line to be the committee Chair. They should have a keen understanding of the responsibilities of the President.
Committee Secretary. The secretary is responsible for the administrative tasks of the committee. It’s one of the most important committee roles. He or she takes detailed notes during meetings, creating and managing the permanent record, correspondence, and documentation of each meeting in the form of meeting minutes They prepare the annual reports and record any changes to the committee bylaws.
Committee Treasurer. The treasurer manages the financial records of the committee. They prepare the annual budget, evaluate trends, provide short- and long-term financial strategy, supports and auditing process. They ensure that everyone understands the financial position of the committee.
High-functioning, productive committees are invaluable assets to their boards. The board’s leadership should foster committees that streamline processes and enable the board to be more productive, focus on strategy, and make faster, more well-informed decisions.
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