Board Committees

Launching and building a new business is a daunting task for any impact entrepreneur. So much to be done and so many issues to be understood and addressed. Impact entrepreneurs need a trusted group of advisors drawn from a broad range of fields and experiences to navigate the journey. Some of these advisors will provide support as a member of the board of directors, a role that carries its own set of specific legal duties and responsibilities. Each board member ultimately has a say in board decisions; however, time is tight for members and the growing organizations that they serve and efficiency dictates consideration of establishing board committees to focus on specific issues that require specialized areas of expertise. Companies create board committees to leverage the special talents, skills and knowledge of individual board members. Due to their backgrounds, committee members can grasp the relevant subject matter more quickly and distill their thinking into recommendations for actions to be taken by the entire board. Committee members can also serve as a platform for educating the rest of the board so that everyone can expand their knowledge base on subjects that will be of ongoing importance to the company. Just as the full board should have a set of policies for operation, board committees should develop committee charters that outline the duties, responsibilities and goals of the committee and require regular reporting to the entire board. Mature companies often have several committees drawn from many directors. Impact entrepreneurs, when first starting out, can replicate the benefits of a committee structure by striving to put together a board of people that bring different skills and who can educate other board members about the issues and development in their sphere of expertise. This chapter provides a detailed overview of the legal requirements associated with establishing and managing board committees, including specific requirements for public companies, and the scope of legal and business issues that are typically addressed by the most popular committees