Board committees

Introduction

It is common in the MCH family for a board to have a number of committees. The most common are Finance and Audit Committees and Remuneration Committees.  Depending on the organisation both may have different names. Other entities have a variety of committees that are specific to their needs. 

Committees should exist for a reason

Most of our entities are not overloaded with committees and the sector reflects a strong prevailing ‘best practice’ view that board committees should only exist where they are necessary and can ‘‘help the board do board work’’. Board committees should also be subject to a regular review as to whether they should continue to exist (see ‘Work Plan’ topic).

Crown Entity Act requirements for committees

Members of Crown entities should be aware that clause 14 of Schedule 5 provides for the board, by resolution, to appoint committees:

• To advise it on any matters relating to the entity’s functions and powers that are referred to the committee by the board; or
• To perform or exercise any of the entity’s functions and powers that are delegated to the committee, if the committee includes at least one member of the board and any other person or persons that the board thinks fit. So Crown Entity boards must ensure that if they want a committee to perform or exercise a board function and/or a power, as distinct from simply advising, that at least one board member is on the committee.

Committee members of Crown entities must also disclose, in a manner similar to that required of board members, any interests they may have.