0 min read

Board committees

Can you cross more off your to-do list if you handle it all yourself or delegate key tasks to trusted colleagues? Most boards — like most leaders — opt for the latter. However, boards delegate to board committees instead of colleagues to stay efficient, effective and decisive.

Spencer Stuart estimates board directors spend roughly 200 hours per year on board-related activities. That’s roughly one working month per year during which directors must meet with each other, shareholders and executives to discuss issues like environmental, social and governance (ESG), risk management, compliance and more. Board committees are a crucial way for boards to make the most of their time, but only if those committees are well structured.

Here, we’ll explain how to build board committees that work, including:

  • What board committees are
  • The role and purpose of board committees
  • Why board committees are important
  • Board committee types and the responsibilities of each
  • Board committee structures
  • How board committees are established
  • Benefits of establishing a clear board committee structure
  • How are board committee members chosen
  • Which onboarding processes or training programs are recommended for new members
  • Board-committee interaction protocols
  • Board committee reporting template
  • Essential board committee best practices
  • Running board committees across jurisdictions, industries and company sizes
  • The real-world impact of effective committees
  • How the right governance platform can help

What are board committees?

Board committees are groups of people — usually individual directors — that focus on specific topics about which members have expertise. The idea behind committees of the board is to tap the specific talents, skills and knowledge of individual board directors to inform and educate the entire board on particular areas of concern. Committees allow boards to divide the work of the board into manageable sections.

Board committees aren’t required to address many of the routine matters that boards must regularly complete and document; committees do much of the legwork in helping the board achieve its objectives. Just as board structures need to uniquely reflect a corporation’s needs, board committee structures must also reflect the strategic plans the board develops.

What is the role of board committees?

Board committees help streamline the board’s work by focusing on specific areas of oversight, strategy and governance. By delegating responsibilities to smaller groups with relevant expertise, the board can examine complex issues more deeply, respond more quickly and give critical matters the attention they require – all the more important in a rapidly evolving business environment.

According to EY, “A dynamic approach to governance is helping boards keep pace with these changes, including through evolving their committee responsibilities and structures to enable a deeper focus on changing business priorities and oversight needs.”

Purpose of board committees

The purpose of board committees is to help the board govern more effectively with deeper insight into specific functional areas. Committees allow the board to:

  • Divide responsibilities into focused areas for more manageable governance
  • Provide in-depth oversight of complex or high-risk issues
  • Leverage specialized knowledge and experience within the board
  • Ensure more thoughtful review and discussion ahead of full board decisions
  • Strengthen accountability by clearly assigning duties and expectations
  • Support strategic alignment between organizational goals and board actions

Why are board committees important?

Board committees are important because they enhance the board’s ability to govern effectively and responsibly. Committees’ focus on key priorities allows for:

  • More efficient use of time and resources: Committees can meet more frequently and dive deeper into issues than the full board.
  • Stronger oversight and risk management: Dedicated groups help ensure key areas receive consistent attention and monitoring that would be difficult for the full board to provide.
  • Better-informed decisions: Committees analyze complex topics and present clear, well-vetted recommendations to the full board.
  • Increased accountability: With defined roles and responsibilities, committees help ensure nothing falls through the cracks.
  • Improved governance practices: Committees support transparency, compliance and alignment with best practices.

Types of board committees

The types of board committees can range from company to company and depend on the support the board needs to meet the corporation’s strategic goals. However, there are some standing committees common among corporations, which include:

Audit committee

The audit committee oversees the company’s financial reporting and internal controls system. Its structure ensures finances remain independent of management, a key control for reducing the risk of fraud and misstatements. Though the audit committee is responsible for conducting the annual audit, it has myriad ongoing responsibilities, including overseeing the financial reporting process, internal controls and independent auditors.

Compensation committee

As the name implies, the compensation committee determines executive compensation, including salary and other benefits. What exactly they do depends on the corporation’s bylaws. Still, the committee will typically either determine compensation amounts on their own or recommend compensation packages to the board for a deciding vote.

Nominating and governance committee

Board members who are not running will participate in the nominating and governance committee, which recruits candidates for both the board of directors and executive leaders. This function is essential to corporations, as the board members will define how effectively the corporation reaches its goals. The nominating process also requires confidentiality, which makes a centralized governance platform crucial.

Investment committee

Most corporations have investment strategies, which are overseen by the investment committee. The committee is responsible for tailoring an investment plan to the corporation’s strategic objectives and financial needs and approving any major transactions. That said, the Chief Investment Officer (CIO) and their team will actually manage the portfolio, so trust between the CIO and the investment committee is key.

Executive committee

Most organizations will experience a crisis. The executive committee will convene to address it because gathering the entire board on short notice can be difficult. Their job is to identify which issues require decisive action and which require the involvement of the full board. Though they have some signing authority, the executive committee is still accountable to the board; it’s important to appoint trustworthy, credible directors to this committee.

Cyber-risk committee

In the face of ever-evolving technology, the cyber-risk committee is charged with mitigating rapidly increasing risks, from breaches to hacks to corporate espionage. This committee oversees all cybersecurity issues, creates a strategy, and works with cybersecurity and risk departments to implement it effectively. They’ll also be the first committee executive leaders look to should new cyber risks arise.

Board committees and their functions

Board committees serve as extensions of the full board, each with a specific mandate that supports governance, compliance and strategic oversight. While the exact structure and scope of committees may vary by organization, their core functions typically include:

  • Focused oversight: Committees provide a closer look at critical areas like financial reporting, risk management and executive compensation, strengthening overall board oversight.
  • Accountability: Committee members are directly accountable for their designated areas, promoting board ownership and responsibility without spreading members too thin.
  • Succession planning: Committees can help identify and groom potential board candidates, ensuring a robust pipeline for future leadership.
  • Policy development: Committees may draft, review or recommend policies that align with the organization’s mission and regulatory requirements.
  • Decision support: By conducting detailed analysis and deliberation, committees help the full board make more informed decisions.
  • Risk mitigation: Committees identify emerging risks and ensure that adequate controls and response plans are in place.
  • Reporting to the full board: Committees regularly report their findings and recommendations to the full board for discussion, approval and action.

Objectives of board committees

In completing the above functions, board committees sharpen the board’s focus on critical areas and foster proactive governance. The main objectives of the process are:

  • Collaborative decision-making: Committees serve as forums for robust discussion and diverse perspectives, improving the quality and breadth of recommendations brought to the board.
  • Optimizing board workflows: Delegating detailed review and groundwork to committees allows the full board to focus on strategic priorities and high-level governance.
  • Fostering transparency and trust: Committees create clear accountability structures that enhance stakeholder confidence in the board’s governance practices.
  • Deepening insight: Committees enable directors to explore complex issues more thoroughly than the full board can. This both expands and deepens board oversight beyond what would be practical for the full board.

Board committee structure

The structure of a board committee depends on that committee’s structure. Some committees are standing — meaning they are omnipresent in the boardroom — while others assemble based on specific needs or to address temporary challenges. Most boards will have a mix of different board committee structures, including:

  • Standing committees: These committees are permanent, meaning they handle specific issues on an ongoing basis. The audit, compensation and nomination, and governance committees are examples of standing committees most — if not all — corporations have. Their presence allows the board to oversee important functions more effectively over time so the full board can focus on broader strategic issues.
  • Ad hoc committees: Unlike standing committees, boards form these committees to address specific issues or tasks on an as-needed — or ad hoc — basis. The committee convenes to address a given responsibility and disbands once it is no longer needed. Ad hoc committees are an excellent option for temporary challenges like overseeing a merger or acquisition or executing a special corporate social responsibility (CSR) initiative.
  • Task forces: Similar to ad hoc committees, task forces assemble for a particular purpose and disband once they’ve fulfilled that purpose. However, unlike ad hoc committees, task forces tend to be more time-bounded and oversee a specific area, like a crisis, a strategic opportunity, or the transition of onboarding a new CEO.
  • Advisory committee: When a board needs advice or recommendations on a specific issue, it will look to the advisory committee. An advisory committee doesn’t have decision-making power but can inform the board’s actions by providing insights based on its expertise or experience. Board directors aren’t usually part of the advisory committee; industry experts, academics, community leaders, or stakeholders will offer their perspectives.

How are board committees established?

Boards form committees to support their ability to govern effectively. While many committees may feel set in stone, boards are adding or expanding committees in response to the business landscape. EY finds that audit committees now oversee topics like cybersecurity, AI and climate in addition to their typical purview.

When it comes time for a board to establish a new committee, it involves a structured process that helps align the committee with the organization’s needs.

  1. Identify governance priorities: The board should first determine where focused oversight or expertise is needed. For example, a startup poised for growth may form a finance committee, whereas a large enterprise interested in AI could form a technology committee.
  2. Define the committee’s scope: The board can then prepare a written charter outlining the committee’s responsibilities, authority and reporting structure. A charter may specify that a governance committee is responsible for board recruitment, orientation and annual self-assessments, for example.
  3. Appointing members: Boards will then select directors with relevant expertise or interest, plus appoint a chair to lead; think a board member with HR experience leading a newly formed compensation committee.
  4. Set operations: Together, the new committee establishes a meeting schedule, communication protocols, and reporting cadence for the full board. These could be quarterly meetings paired with written board reports submitted before each board meeting.
  5. Review and adjust as needed: The board periodically evaluates the committee’s performance and makes adjustments to its scope or composition.

Benefits of establishing a clear board committee structure

Board committees provide a platform for boards to deal with specific issues requiring specialized expertise. As a result, committees of the board can set their agendas so they can get down to the meat and bones of their work right away.

This helps the board divide its work into manageable and decisive areas, which:

  • Maximizes efficiency: Certain board issues are of such a complex nature that they demand substantially more time than a board can commit to during the course of one or two board meetings. Boards can establish committees for nearly any need that they have to maximize their efficiency.
  • Uses time wisely: According to a research paper by Harvard Business School, committee size tends to increase with firm size. A committee of the board allows board members the proper time required to research various issues and permits broader participation by all board directors.
  • Increases accountability: Committee members have specific assigned tasks and are directly accountable to the full board for completing them. Because committees have dedicated time for addressing agenda items, boards expect them to conduct due diligence and be thorough, yet timely, in pursuing their responsibilities.
  • Bolster’s oversight: Committees can provide a more in-depth look at different issues facing the board because they can focus their time and attention on what’s in front of their committee and set aside issues facing others. This helps satisfy boards’ need for concise, comprehensive information to guide their votes on specific issues.
  • Breaks down silos: With an eye on efficiency and to prevent duplicity, many boards structure their committees with multi-committee directors. Directors who sit on several committees share helpful information, alleviating information segregation issues. Multi-committee directors tend to be outside directors with a surplus of expertise in several areas.

How are board committee members chosen?

How effectively board committees enhance oversight and governance comes down to its members. Choosing board committee members should balance expertise, engagement and diversity to build well-rounded committees capable of addressing complex issues.

  • Assessing skills and expertise: Boards often use skills matrices or competency frameworks to identify which members have the specific professional backgrounds, technical knowledge or industry experience needed for each committee. This equips committees with the expertise they need to understand and oversee specialized topics.
  • Considering interests and availability: Beyond skills, boards consider directors’ personal interests and enthusiasm for particular subject areas. Members’ ability to committee for sufficient time is also critical, as active participation, preparation, and attendance at committee meetings drive meaningful contributions and productivity.
  • Considering diversity and balance: Strong committees include diverse perspectives across gender, ethnicity, professional background, age and thought. This variety helps prevent groupthink, encourages innovative solutions, and better reflects the communities and stakeholders the organization serves.
  • Appointing committee chairs: The board works with the nom/gov committee to appoint chairs based on their leadership ability, expertise relevant to the committee’s focus and skills in facilitating discussion and managing committee dynamics. A strong chair ensures the committee operates efficiently and that all voices are heard.
  • Term limits and rotation: Many boards implement term limits or regularly rotate committee members to bring fresh perspectives, avoid stagnation and provide development opportunities for board members. This also helps maintain a dynamic and engaged governance body.
  • Managing conflicts and skill gaps: Boards carefully review and address potential conflicts of interest during the selection process to preserve impartiality. When skill gaps exist, boards may provide training and mentorship or bring in external advisors to supplement the committee’s capabilities.
  • Regular review of committee composition: Committees and the full board periodically reassess membership and structure to ensure they remain aligned with evolving organizational priorities, regulatory changes and governance best practices. This ongoing evaluation helps maintain effectiveness and relevance.

Board-committee interaction protocols

Clear communication and structured interaction between board committees and the full board are essential for effective governance. Establishing protocols around reporting, meeting frequency and tools helps promote transparency, accountability and timely decision-making.

Reporting flow

Committees should regularly report their findings, discussions and recommendations to the full board. This typically happens through written reports submitted in advance of board meetings, supplemented by verbal summaries during meetings.

Reports should be clear and concise and highlight key risks, pending decisions, and action items.

Frequency of reporting and meetings

The frequency varies by committee type and organizational needs, but most committees meet quarterly and report to the board at least once per board meeting cycle. More frequent meetings or reports may be necessary during periods of heightened activity or risk.

Use of standardized templates and dashboards

Employing standardized reporting templates ensures consistency and completeness in the information committees provide. Dashboards can offer real-time data and visual summaries to help the board quickly assess critical metrics.

Technology and collaboration tools

Leveraging board management software and secure communication platforms facilitates efficient information exchange, meeting coordination and recordkeeping. Common types of tools include:

Escalation processes

Clear protocols should be in place for committees to escalate urgent issues or risks directly to the board or executive leadership outside of regular meetings when an issues requires immediate attention.

Feedback loops and follow-up

The board should provide feedback on committee reports and decisions, creating a two-way communication channel that encourages continuous improvement and alignment.

Board committee report template

A standardized board committee report template ensures consistent, clear and actionable communication between committees and the full board. While board portals streamline report creation and delivery, you can also leverage a template like the one below to simplify reporting.

1. Committee name and date

2. Prepared by:

  • Name of the committee chair or designated member submitting the report

3. Meeting overview

  • Date of the most recent meeting
  • List of attendees
  • Summary of agenda items

4. Key discussions and outcomes

  • Highlight major topics covered
  • Note key findings, strategic considerations or progress updates
  • Include bullet points for clarity

5. Decisions made

  • List any votes taken or formal decisions made by the committee
  • Include context or rationale, if helpful

6. Recommendations to the board

  • Clearly outline any items that require board attention, input or approval
  • Specify whether action is required or if the item is for information only

7. Risks, issues or concerns

  • Identify any emerging risks or unresolved issues the board should monitor

8. Next steps and follow-up actions

  • Summarize action items assigned to the committee or others
  • Note timelines or responsible parties

9. Attachments or supporting materials

  • Reference or link to supporting documents, dashboards or detailed reports

15 board committee best practices

Research has shown that most board activities happen within committees, especially post-SOX. This has intensified the focus on having board committees and ensuring they operate seamlessly and efficiently.

However, creating a committee isn’t foolproof; establishing committees requires careful planning and alignment with the corporate strategy to ensure boards get the most out of the committee structure.

To create committees that make the board more effective — not less — corporations should:

  1. Create committees for a specific purpose: Boards should form committees to do the work that is impossible or impractical for the board to perform independently. Many boards make the mistake of forming too many committees for too little reason, often stretching board directors too thin. Without a solid purpose, committee members become bored and unproductive.
  2. Set clear expectations from the start: Boards can help with committee organization and should convey specific expectations for ongoing activity and results. The committee charter will specify objectives, members' responsibilities, and timelines and clarify the scope of the committee's authority — including the recommendations the board expects as output.
  3. Select a strong committee chair early: Selecting the right chair is a crucial early decision in board committee management. This individual can determine the committee's success or failure. Choose someone who can skillfully facilitate contributions from all members, is well-versed in group decision-making processes and is highly organized. Interpersonal and organizational skills are more predictive of excellent committee leadership than subject matter expertise.
  4. Be flexible: A board’s needs are ever-changing. Accordingly, committee work assignments must be flexible and change as often as necessary to keep committee work aligned with the board’s strategic priorities.
  5. Identify the right committee size: Just as board size is important, committees can also be too large or too small to perform meaningful work. Committees that are too large risk not getting all their members’ valuable perspectives and opinions and risk slowing down the committee’s work. Committees that are too small risk board directors being too busy to commit to their board and committee duties fully, and they may fail to arrive at committee meetings prepared and ready to engage.
  6. Regularly review committee performance: To keep up with committee objectives, boards must periodically evaluate whether the committee’s instructions are clear and relevant and ensure they don’t overlap with other committees’ responsibilities. Ensure each committee has clear, distinct responsibilities and a system for fulfilling them.
  7. Find the right structure for your board: Some boards function best by rotating board directors through various committees so they gain a greater understanding of each committee’s work. Others retain the same members on committees so that they develop a deeper level of expertise in the committee’s area of work and become an integral part of helping the committee reach its goals. It’s also possible to take a hybrid approach and find some balance between the two approaches. Where issues may intersect, committees may join together occasionally to collaborate.
  8. Form committees strategically: To fulfill their fiduciary duties, boards must meet the growing pressures from legal and regulatory authorities. In today’s climate, boards must take a proactive approach by focusing more on committees’ work and how they interconnect with other committees rather than forming committees as a matter of routine. Boards guide committee work with the goal of shaping the board.
  9. Leverage different committee types: Forming subcommittees is a good way for committees to tackle highly specific work. Subcommittees can be instrumental in making committee work manageable. Boards usually have a few standing committees and form ad hoc committees as needed. Ad hoc committees meet for a shorter period and are charged with working on specific issues.
  10. Allow for written reports: Committees may make oral or written reports, which should become part of the meeting minutes. To save valuable board time, board committees that haven’t taken any action and don’t have crucial information to report may file a short, written report of the committee’s work and include it in the board meeting materials. As a word of caution, board directors shouldn’t take meeting time to review written committee board reporting.
  11. Assign directors to a manageable number of committees: Boards have various schools of thought regarding which board directors to choose for their committees. Best practices suggest that board directors shouldn’t serve on more than two committees in the interest of being committed and effective.
  12. Foster strong collaboration between the committee and board: Once established, managing board committees is a joint responsibility of the committee chair and the board president, who serves as an ex officio committee member. Open communication, mutual trust, and aligned priorities are essential to success.
  13. Run efficient and purposeful meetings: The committee chair should solicit agenda items, circulate materials in advance, and set the expectation that members come prepared. Meetings should start and end on time, stay on the agenda, and avoid delays due to late arrivals. Minutes should be distributed promptly after each meeting.
  14. Evaluate and refresh board committees: As with the full board, each board committee should conduct an annual evaluation and occasional refreshment to ensure the committee composition still aligns with the committee’s goals. In particular, each board committee needs to ensure a succession plan is in place for onboarding new members and new committee chairs.
  15. Leverage the right tools and technology: Providing the right tools is essential to effective board committee management. Board management software supports secure collaboration, pre-meeting preparation, document sharing and post-meeting reporting. These tools can streamline committee operations just as effectively as they do for full boards.

Running board committees across jurisdictions, industries and company sizes

While the core principles of board committees remain consistent, applying them across jurisdictions, industries and organizational scales requires adaptation. Legal requirements, regulatory expectations, operating environments and resource availability all influence how committees are structured and governed.

Navigating jurisdictional differences

Boards operating in multiple countries or regions must adapt committee practices to comply with varying legal and regulatory requirements. Committees must align with the legal, regulatory and cultural governance norms of the jurisdictions in which the organization operates.

  • United States: Public companies are subject to SEC regulations and stock exchange requirements, such as mandatory audit, compensation and nominating/governance committees.
  • United Kingdom: The UK Corporate Governance Code encourages formal board evaluations, independent oversight and defined committee charters, especially for FTSE-listed companies.
  • Europe and the Middle East (EMEA): Governance requirements in the region vary widely; EU-listed companies must often comply with both national law and EU-wide directives like the Shareholder Rights Directive II.
  • Asia-Pacific (APAC): Jurisdictions such as Singapore and Australia promote strong risk and audit oversight, though approaches to independence and board composition may differ.

Adapting to industry-specific needs

Each industry faces unique regulatory environments, strategic risks and stakeholder demands that shape the role and focus of board committees.

  • Healthcare: In the healthcare industry, regulatory scrutiny is intense. Committees often needs to oversee compliance with health privacy laws (such as HIPAA in the U.S.), patient safety protocols and the ethical use of data and treatments. Quality and compliance committees may work closely with leadership to ensure clinical standards are upheld and that the organization remains aligned with rapidly evolving health regulations and reimbursement models.
  • Technology: Technology companies — especially those in software, AI and digital infrastructure — operate in fast-paced environments where innovation and risk intersect. Board committees may be tasked with overseeing cybersecurity posture, data governance, intellectual property protection and the ethical use of emerging technologies. Some boards also create innovation or digital transformation committees to ensure that new technologies align with business strategy and stakeholder expectations.
  • Manufacturing: In manufacturing, operational risks, supply chain disruptions and environmental impact require close board oversight. Committees may be responsible for monitoring safe practices, quality assurance and regulatory compliance across global operations. In organizations with significant environmental exposure, ESG or sustainability committees are increasingly common, helping oversee emissions targets, waste management and responsible sourcing practices.
  • Insurance and financial services: Boards in the insurance and financial sectors often face complex regulatory requirements and must manage significant financial and reputational risks. As a result, these companies typically have highly specialized committees focused on audit, risk, investment and compliance. Risk committees, in particular, are vital for monitoring solvency, underwriting practices and adherence to international regulations such as Solvency II, Basel III or local insurance supervisory standards.

Scaling committee structures for SMBs and enterprises

The size and complexity of an organization significantly influence how its board committees are structured, resourced and managed. Whether a company is a small startup, a mid-sized business or a global enterprise, committee design should reflect the organization’s governance needs without creating unnecessary administrative burden.

  • Small and mid-sized businesses (SMBs): In SMBs, boards are often smaller and may have limited staff or administrative support. Committees are, as a result, typically fewer in number, with some board members serving on multiple committees or fulfilling multiple roles. Committees in these organizations tend to be less formal but still play a critical role in ensuring financial oversight, strategic planning and basic compliance. In some cases, boards may choose to operate as a “committee of the whole” for certain functions to streamline decision-making.
  • Enterprises and large organizations: Large companies often manage significant regulatory exposure, operational complexity and stakeholder expectations, requiring robust and specialized committee structures. These organizations usually maintain multiple standing committees, each with a detailed charter, dedicated meeting schedules and specialized reporting frameworks. Committees in enterprise settings may also leverage external advisors, legal counsel, and internal audit teams to inform them of their oversight responsibilities.

Real-world impact of effective board committees

Imagine you’re a leading international company with more than 90 years of activity. As you grow, you’d need a powerful board and committees, but your board is bogged down by inefficient, insecure workflows.

That was the reality for Moeve, formerly Cepsa, a global company dedicated to sustainable energy and mobility. Preparing for board and committee meetings was cumbersome, and the process of obtaining signatures was inefficient and outdated.

“We were getting documents sent right and left, and would need to put all the materials together in board or committee packs in time for our meetings, which was, needless to say, very time-consuming, especially if there were last-minute changes,” says Corporate Governance Specialist Christine Papazian.

The secretary of the board and the board chair began to advocate for a digital

board management platform. Though their primary motivation was security, Diligent Boards offered so much more.

Papazian says, “We got Diligent because of security reasons and then we saw just how wonderful it was when it comes to organizing information, sharing information and keeping it all in one repository.”

The company no longer worries about security. What’s more, the platform’s centralized document management system streamlined board and committee meeting preparation, allowing for all documents to be compiled in one digital location.

“It’s amazing how much time we’re saving in terms of compiling and distributing agendas and materials and updating them ahead of our meetings or simply making information available as quickly as possible whenever directors have to vote on urgent matters. We’re all convinced Diligent users now,” says Papazian.

Driving board committee effectiveness with Diligent GovernAI

Board committees have an ever-growing list of responsibilities. ESG, cybersecurity, AI and more have joined agendas already packed with audit, succession planning and governance priorities. Leveraging digital platforms can help board committees operate more efficiently, securely, and strategically.

Diligent GovernAI drives efficiency at every step of the committee process:

  • Reduce meeting prep time: Diligent GovernAI’s Smart Book Builder automates the creation of board and committee packs by synthesizing various input documents — PDFs, spreadsheets, presentations — into an accurate, pre-formatted board or committee book. With Govern AI, you’ll never build a board book from scratch again.
  • Support accurate record-keeping: Smart Minutes generates high-quality first drafts of committee meeting minutes from notes, materials or transcripts. This significantly reduces the administrative burden of board committees and makes minutes more accurate.
  • Stay up-to-date: Smart News & Prep Insights surfaces timely market and industry developments and distills board and committee books into concise, actionable insights. With documents in hand, directors will always be ready for proactive discussions and strategic decisions.
  • Keep ahead of risk: Identify potential risk topics and legal language in committee materials with Smart Legal Scanner. This aids legal teams in proactive review and risk assessment, catching risks before they become costly threats.
  • Enable proper AI governance, oversight and compliance: Committees can’t oversee what they don’t fully understand. Our AI Education & Templates Library provides bite-sized resources to help boards manage emerging technology effectively.
  • Hold committee members accountable: The GovernAI Action Tracker turns shorthand notes and historical meeting materials into actionable next steps, making it easy for committees to follow through on key tasks.

Prepare board committees for the future of AI

The question isn’t whether AI is here to stay. It’s, “What will AI transform next?”

The right AI solution can help committees stay ahead, automate manual tasks, spot threats early and deliver smart governance insights to the full board. However, boards and their committees often wonder how to know whether AI will boost impact fast or lead to regulatory headaches and risk exposure.

Diligent’s guide to AI demystifies AI for boards and board committees. Inside, you’ll discover actionable evaluation criteria for efficiency, innovation, ease of use, security, and ethics so you can find the right solution faster.

Download the guide today to uncover the full potential of AI for board and committee governance.

FAQs

What are typical board committees?

Typical board committees include the audit committee, compensation committee and nominating/governance committee. Many boards also establish risk, finance and cybersecurity committees to address specialized oversight areas. The specific committees a board forms often depend on the organization's size, industry and regulatory requirements.

What are the three advisory committees that advise the board of governors?

The three commonly referenced advisory committees to the Board of Governors — particularly in the context of the U.S. Federal Reserve — are:

  • The Federal Advisory Council (FAC)
  • The Consumer Advisory Council (now defunct, replaced by the Consumer Financial Protection Bureau)
  • The Thrift Institutions Advisory Council (TIAC)

These committees provide insights from banking, consumer and financial institution perspectives to inform monetary policy and regulatory decisions.

What are not functions of board committees?

Board committees are not responsible for making final, binding decisions on behalf of the entire board unless specifically delegated to do so. They typically do not manage day-to-day operations, execute organizational strategy or represent the board in public without authorization. Their primary function is to review, recommend and support governance, not to directly manage the organization.

In which section of the Companies Act are board committees formulated?

In many jurisdictions, board committees are addressed under the Companies Act or equivalent corporate governance laws. For example:

  • In the UK Companies Act 2006, while board committees are not explicitly required, their formation aligns with the UK Corporate Governance Code.
  • In India’s Companies Act 2013, key committees like the audit committee are mandated under Section 177. The specific section varies by country and regulatory framework, so boards should consult the Companies Act applicable in their jurisdiction.

How many committees should a board have?

The ideal number of board committees depends on the organization’s size, industry and complexity. Most boards have three to five standing committees, with audit, compensation and governance being the most common. Boards should form only as many committees as necessary to ensure effective oversight without overburdening directors or creating redundant structures.

How do you balance workload and director participation across multiple board committees?

To balance workload, boards should carefully map director expertise, availability and interests when assigning committee roles. Using skills matrices, rotating committee memberships, limiting the number of concurrent committee assignments per director and setting realistic meeting schedules help distribute responsibilities fairly. Periodic evaluations can ensure directors are not overextended and that committees remain productive.

Which emerging risks or opportunities might warrant the creation of new board committees or the restructuring of existing ones in your organization?

Emerging risks like cybersecurity threats, climate change, artificial intelligence, data privacy regulations and evolving ESG standards may prompt boards to create new committees or expand existing ones. Boards may also restructure committees to address digital transformation, geopolitical risk, stakeholder engagement or industry-specific disruptions. Regular governance assessments help boards stay responsive to these shifts.

How effectively are your board committees facilitating cross-functional collaboration, and what mechanisms could further break down silos between committees or between the board and management?

Board committees can facilitate cross-functional collaboration by holding joint committee meetings, sharing real-time dashboards and standardizing reporting structures. Mechanisms such as overlapping committee memberships, cross-briefings, dedicated liaisons and unified board management software help break down silos between committees and improve coordination with management teams.

How do specialized committees within the board of directors enhance corporate governance?

Specialized committees enhance corporate governance by providing focused oversight, leveraging specific expertise and improving the board’s ability to address complex, high-risk areas like audit, risk and cybersecurity. These committees streamline decision-making, increase accountability and ensure that critical topics receive detailed attention without overwhelming the full board.

What steps could be taken to enhance accountability and decision-making within committees, especially when committee recommendations have significant organizational impact?

Steps to enhance committee accountability include defining clear charters, setting measurable performance goals, implementing formal reporting protocols and regularly evaluating committee effectiveness. Requiring transparent documentation of discussions, ensuring timely board feedback and periodically reviewing committee recommendations can strengthen decision-making and governance impact.

How can diversity, equity and inclusion (DEI) be effectively embedded into committee composition and operations?

Boards can embed DEI into committee work by intentionally recruiting diverse committee members across gender, race, age and professional background. Regular DEI training, inclusive facilitation practices and setting diversity targets for leadership positions within committees can help sustain DEI efforts. Committees should also integrate equity-focused questions into decision-making processes to ensure diverse perspectives are consistently considered.

security

Your Data Matters

At our core, transparency is key. We prioritize your privacy by providing clear information about your rights and facilitating their exercise. You're in control, with the option to manage your preferences and the extent of information shared with us and our partners.

© 2025 Diligent Corporation. All rights reserved.