— Governance Matters (@GovernanceMatt) August 18, 2016
As mentioned in Part I of our discussion on types of committees versus task forces, the key differences are longevity and composition.
Governance committees are permanent structures, made up of board members, there to advise the board in an ongoing capacity. The board might also create shorter-term task forces – bodies like a building committee to oversee the construction of a new building. These task forces will typically comprise a mix of board members and external industry experts. They will then disband once the project is over.
There is, however, one exception!
The nature of what a company or organisation does might well require additional committees that are there for the long haul.
I’m thinking here of bodies such as scientific research entities, where there is enormous logic in creating a scientific committee made up of board members and outsiders with the appropriate skills and knowledge.
Another example could be a not-for-profit establishing a fundraising committee, where a dedicated group, again comprising board members and independent external colleagues with the high level expertise, oversee fundraising efforts.
While it assists the Board to have governance committees and taskforces these should not be confused with operational committees which should, instead, be assisting management if they are necessary at all.
This is more likely to occur in the not-for-profit sector where, for historical reasons, the organisation might have lacked depth in management and staff and it became incumbent upon the board to get involved in what was essentially operational stuff.
They’d establish things like membership committees, operations committees, human resources committees and finance committees. All was well and good until management and staff became more sophisticated and entire departments were established to attend to these areas.
That’s when they should have been disbanded, but they continued to exist, reporting directly to the board. The upshot was a complete double-up of what management was doing.
Which begs the questions: why would you retain a committee when there’s a perfectly capable and abundantly staffed department handling these matters? And why would it continue to report directly to the board rather than, as an operational matter, to the CEO?
— Governance Matters (@GovernanceMatt) August 19, 2016
I guess the most generous answer one could offer is that the board has failed to regularly consider the various committees and their relevance in the light of the shifting sands of time.
If they still have validity, keep them going until the next review; if not, give them the flick!
And, of course, if they do continue, the board needs to appreciate that these are operational bodies that should report via the CEO.
Until next time,