| Author's Name: Mark Schultz
Date: Mon 12 Oct 2015
Sub committees are generally seen to be a useful approach to dealing with the business of the board and can deliver real benefits to the governance of an organisation; however there are potential down sides which should be considered and managed to achieve the best results for the business.
There are a number of benefits to be gained from adopting a subcommittee structure to assist in the effective management of the board’s business and these include:
Focus: a subcommittee directs its attention to one matter only, thereby enabling issues to be more closely planned, reviewed and monitored in a given time;
Organisation size: if the organisation is large and complex, a subcommittee structure is an efficient means to enable the board to deal with all it has to deal with at board level. It may require additional meetings, however it generally means that the monthly board meeting is more manageable and effective itself;
Access to additional resources: a subcommittee may second additional resources to assist in undertaking the subcommittee’s activities ie specific expertise that may not be available around the board table. As a subcommittee can only recommend and not make any binding decision, individuals contributing to a subcommittee do not carry the same degree of responsibility as an elected director; and
Learning: such a structure is beneficial in the induction and upskilling of new board members in the business of the organisation, as it allows for more time for individual board members to discuss, analyse and learn about the business.
The downside, complacency: unless the membership of subcommittees is rotated on a regular basis (whilst maintaining some continuity to ensure effectiveness), complacency can set due to a feeling of “they are looking after that” attitude arsing amongst board members. However being mindful of this is a simple way to ensure it does not happen.
In summary, subcommittees can generally contribute to the effective governance of an organisation, given the benefits of adopting such a structure. Like all structures though, the board should review its subcommittees through a formal process on an annual basis to ensure there is alignment between the strategy and the goals the organisation is striving to achieve. There is no right way, only the way that delivers the best result for the organisation.