Basics of committees
Introduction to committees
The effective use of committees can broaden the capacity of a board to build and maintain its success, balancing the internal and external requirements of an organisation as it conducts its business.
Committees give your board the opportunity to delegate lengthy or technical discussions, decisions and oversight to a subset of the board with the addition of committee members with specific relevant expertise. They also support your board’s effectiveness by delegating agreed matters to this alternative forum, thus enabling the board to focus on and prioritise their time and expertise.
Whether your organisation takes the legal form of a large company, small company, registered charity or small not-for-profit organisation, delegating some authority from the board to committees can be invaluable, as long as their remit is clear, their deliverables are monitored and effective oversight is maintained. Ultimate responsibility remains with the board. The is explicit in its requirement that organisations must be led by a board that is collectively responsible for the long-term success of the organisation and exclusively vested with the power to lead it.
While a complex committee structure will not be appropriate for many organisations, the Code for Sports Governance’s Tier 3 requirements are clear:
1.23 The Board shall maintain an audit committee and (either on a permanent or an ad hoc basis) a nomination committee unless the particular circumstances of the organisation are such that it is appropriate for the Board to act as the nomination committee.
1.24 The Board shall establish any further committees which it considers necessary to support its work.
The Code suggests other considerations which may be delegated to committees, such as ethics and compliance or sport-specific issues like particular disciplines within a sport.
An organisation’s governing document should be consulted to check whether it confers on the board the power to create committees.
A committee can be defined as a group of individuals appointed by your organisation to act on behalf of, but not instead of, the board of directors, under the framework of defined terms of reference in respect of a particular subject matter with pre-agreed duties and responsibilities. The committee has no direct powers other than those duties delegated in writing by the board.
All committees have a responsibility to act in the best interests of the organisation via their role in supporting the board of directors. Committees are a delegated forum working on behalf of the board and do not act independently. By delegating specific roles, duties and responsibilities, the board does not divest itself of its own obligations and authorities.
Purpose of committees
A committee is set up under defined and documented terms of reference which are discussed, agreed and approved by the board. These terms of reference then constitute the purpose of the committee. Their content must clearly define the remit of the committee as well as any authority delegated to the committee by the board. While the committee may make decisions concerning the role they are performing, they do not have the authority to make decisions on behalf of the board.
Skills and composition
Members of the committee are appointed for their expertise within the specific remit of the committee. Diversity of experience, knowledge and outlook for the board is key to having an effective board, and effective committees. For example, while an audit committee will, by its nature, have a majority of members with an accounting background, diversity of discussion can be facilitated through having members with alternative backgrounds and experience of financial matters.
Composition of a committee is dependent on its terms of reference, the specific drivers to implementing a committee and the nature of the business. It is the contribution of the committee as a whole that brings added value rather than the strength of any one individual. Hence it is important that the committee as a collective body is appointed with individuals bringing complementary skills and knowledge.
The number of members of each committee should be defined, usually by stating the minimum number of members that should be in place at any one time. Consideration should also be given to the size of the organisation, whereby a large committee may not be appropriate for a smaller organisation or for one with a narrow focus. Think about the culture of the organisation and whether this should be reflected in, or challenged through, the composition of the committee.
The terms of reference may also state, for example, that the audit committee membership should include a representative of the risk committee and vice versa to enable transparency across committee work. Consideration should be given to the purpose of the committee and the skills and expertise that would benefit the deliverables identified. Through this, individual members’ attributes can be identified and the number of members that would be required to be able to provide such expertise.
The effectiveness of the committee should also be reflected in its size, given that a large committee membership will drive lengthy discussion and long meetings, potentially resulting in sub-committee meetings. Given this, smaller committees may be more effective in time management and effectiveness, especially if combined with utilising external contributors or sub-committee forums for topic-specific or technical knowledge. Where expertise or skills gaps exist, committees can request experts to contribute and/or attend committee meetings to share their expertise as appropriate. An individual who attends a meeting as a non-member would be documented in the minutes as in attendance ‘by invitation’. They may attend all of the committee meeting or just relevant parts.