{"id":510,"date":"2026-01-27T11:20:57","date_gmt":"2026-01-27T11:20:57","guid":{"rendered":"https:\/\/ruthfinch.com\/website\/?p=510"},"modified":"2026-01-27T11:20:57","modified_gmt":"2026-01-27T11:20:57","slug":"board-committees","status":"publish","type":"post","link":"https:\/\/ruthfinch.com\/website\/board-committees\/","title":{"rendered":"Board committees"},"content":{"rendered":"

Board committees don\u2019t receive sufficient attention, in my view. Yes, there\u2019s considerable focus on terms of reference and reporting to the board. And chairs of committees at banks and a number of other financial institutions are SMF senior managers; some of them are interviewed before being approved by regulators. But there are various points I\u2019ve seen in practice that remain as consistent wrinkles. Here are some thoughts.<\/p>\n

1\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Identifying the committees established by the board<\/strong> \u2013 this is a point I come across frequently. The board is at the top of the governance tree. It has the right to establish committees and should receive reports from those committees. The committees, in turn, usually have the right to establish other committees \u2013 sub-committees \u2013 and receive reports from them, the results of which should then be part of the committee\u2019s report to the board. All<\/em> committees are derived from the board but I often come across situations where executive committees are seen as entirely separate from the board \u2013 a form of corporate immaculate conception. An executive committee\u2019s terms of reference should set out the powers and responsibilities given to it by the board. Exco sub-committees\u2019 powers and responsibilities will need to be derived from the exco\u2019s powers and responsibilities in its terms of reference. Exco\u2019s sub-committees \u2013 and they are sub<\/em>-committees of exco with a reporting line to it, not executive committees of equal standing with the exco \u2013 need their own terms of reference, derived from and consistent with exco\u2019s own terms of reference. This isn\u2019t being pedantic or picky, wordsmithing or playing with semantics. It\u2019s a matter of governance.<\/p>\n

2\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Allocation of business to board committees<\/strong> \u2013 the issue here is whether the board, or a board committee, should review, approve and otherwise have responsibility for dealing with a particular matter. With board audit committees, the allocation of business between the committee and the board tends to be quite straightforward. The same is generally true of remuneration, nominations and people committees (which are sometimes merged into a single committee), although I\u2019ve also seen a wider pool of directors \u2013 or the board as a whole \u2013 wanting to be involved in the work of those committees and\/or wanting to know (or even have a say in) what happens there.<\/p>\n

The committees where I see most blurring of the lines are board risk committees and any culture and conduct committee that the board has established. In each of these cases, the issue is whether the committee<\/em> has responsibility for things that the board<\/em> should consider and decide. The common issues centre around whether:<\/p>\n