A board committee is a small working group identified by the board consisting of board members for the purpose of supporting the board's work. Discuss the rationale behind board committees.

A board committee is a small working group identified by the board, consisting of board members, for the purpose of supporting the board's work. Committees are generally formed to perform some expertise work. Members of the committee are expected to have expertise in the specified field. Committees are usually formed as a means of improving board effectiveness and efficiency, in areas where more focused, specialized and technical discussions are required. These committees prepare the groundwork for decision-making and report at the subsequent board meeting. Committees enable better management of full board's time and allow in-depth scrutiny and focused attention. However, the Board of Directors is ultimately responsible for the acts of the committee. Board is responsible for defining the committee role and structure Board committees are pillars of corporate governance. Board committees with formally established terms of reference, criteria for appointment, life span, role and function constitute an important element of the governance process and should be established with clearly agreed reporting procedures and a written scope of authority. A Board can either delegate some of its powers to the committee, enabling it to act directly, or can require the recommendations of the committee to be approved by the Board. Committees thus enable better management of the board's time and allow in-depth scrutiny and focused attention. Committees need clear goals, objectives, and terms of reference in order to function efficiently, and Boards should ensure that these are developed before establishing the committee. Many committees have been known to work outside their intended purpose due to a lack of precise objectives. Rational behind Board Committees : To improve Board effectiveness and efficiency. Minor details needs to be evaluated/ analysed to arrive at a logical conclusion- This requires body having expertise in subject matter, a Board Committee shall in such cases assist the Board and give well considered recommendations to the Board. e.g. Audit Committee go through minor details of internal audit reports which is not possible and give suitable recommendations, this is not possible for entire Board to consider. Insulate Board from potential undue influence of controlling shareholders and managers. Committees prepare groundwork for decision making and submit their recommendations to the Board for decision making. Enables better management of Board's time and allows in-depth scrutiny of proposals. Establishing committees is one way of managing the work of the Board and strengthening the Board's governance role.