Board committees: Purpose, tasks, and value

Abstract

How do effective directors ensure the committees of the board are functioning well and that their contribution to and impact on the board and firm performance can be enhanced? Based on a framework of global corporate governance best practice, which can be used in all organisations anywhere in the world, this chapter of Questions To Ask (QTA) in the boardroom gives a high-level but succinct introduction to the purpose, task, and value of board committees. All directors should ensure that there is complete clarity of the purpose, task, and value committees bring, to ensure the board is as effective as possible. Committees are an important part of governance, and the importance of regular discussions about how they exactly operate, their role and contribution to good governance and sustainable company performance, should not be underestimated. The chapter considers the different committees boards can have with a more detailed focus on the main ones: audit committee, remuneration committee, and nomination committee. It also looks into the value and challenges of committees. The chapter’s introduction leads into outlining the key Questions To Ask in the boardroom, giving the reader further insight into how to initiate discussions about the practical details requiring the attention of the board with regards to the committees.