Many types of organizations can benefit from committees, but what exactly is a committee, and what purpose does it serve?
Committees are special task forces or focus groups set up by the board of directors to oversee and carry out projects as deemed necessary. Projects could include fundraising, improving employee morale, setting up safety training and virtually anything else that the board of directors feels is important to the growth of the company.
In order to understand the organizational structure of a committee, you first need to understand the hierarchy of the organization as a whole, starting with the board of directors.
The Board of Directors: Executive Committee
Not all organizations have or need a board of directors. Public companies are required to have a board of directors, but private companies don't need them. A board of directors is also commonly seen in the nonprofit sector. The purpose of the board of directors is to represent the interests of the shareholders, make major financial decisions, oversee the executives and provide resources when needed.
Because the shareholders have invested money to allow the company to grow and succeed, their opinions matter to the company. The officials elected to the board of directors are typically shareholders themselves. They can either work for the company or be a community member. Community members with special skills, such as lawyers or medical professionals, are an asset to certain boards of directors because of the resources and knowledge to which they have access.
Boards can consist of anywhere between about three to 30 members, but research indicates that an effective number of directors is seven. It is also important to point out that board members should not have a conflict of interest or that they should declare a conflict of interest if it does arise, such as if they can personally benefit from policies discussed by the board. This keeps the board ethical and focused on the benefit of the company as a whole.
Hierarchy of the Board of Directors and Roles
Within the board of directors is an executive team with special duties. Typically, these roles include the president, vice president, secretary and treasurer. Every single board of directors creates its own set of bylaws that govern the specific roles of the executive team, how individuals can be appointed to those roles and how long they can serve. A common method involves choosing these roles by board vote on a yearly basis.
Other important roles filled by the directors include committee chairs. When the board of directors identifies an operational problem within the corporation, a board member with relevant experience and passion is appointed or elected to form a committee and serve as the committee chair. The committee tackles the problem through research, strategic planning and shared insight.
Then, the chair brings his findings and suggestions to the board. Once the plan is approved by the board of directors, the committee oversees its implementation. This board member serves as the committee's spokesperson during board meetings and helps the committee stay on track with the board's goals. It is the committee chair's responsibility to make sure that any resources the committee needs are brought to the attention of the board and duly allocated.
Board of Directors Committee Structure
The committee structure mimics the hierarchy of the board of directors. After all, the board of directors essentially represents a committee for the entire organization. The board of directors should have bylaws that govern how a committee is formed, how its members are chosen and how its executive roles are filled.
Committees can have their own executive team consisting of a president, secretary and treasurer. The committee chair fills the role of the president in many committees, while the secretary and treasurer are often decided by vote or are hand picked by the board of directors. Committee members may also be hand selected or decided by vote.
Members of the committee represent individuals with particular skills or passion for the committee's goals. For example, a committee devoted to improving workplace safety may include a crew manager, facilities maintenance manager and/or a shareholder with a background in inspections or even in insurance. Therefore, a committee organizational chart looks something like this:
- Committee Chair/President: This individual leads the agenda during meetings and often has the final say during disputes.
- Secretary and Treasurer: The secretary is in charge of creating and distributing meeting minutes and agendas as well as taking care of other paperwork. The treasurer acts as the accountant for the board.
- Committee Members: They offer insight and opinions on points of discussion and can lead a committee.
Goals of a Committee
The specific goals of a committee can vary widely, but the most important thing is that the committee does indeed have a clear goal. They usually are tasked with finding a solution to a problem and then implementing that solution.
Committees are ideal in situations where the problem at hand is too monumental for an individual to handle alone as well as too time consuming for the board to discuss. These small groups thrive off brainstorming and creativity. Committees emphasize teamwork and also help show that the organization values the opinions and skills of its employees, giving them some power to suggest and implement important changes.
Committees can come together long term or short term or on an as-needed basis. For example, the committee may disband once the problem is solved, or they may meet on a less-frequent basis in order to discuss ongoing maintenance and improvements.
Committees Can Have Subcommittees
The types of organizational structure within a company or nonprofit can be multi-tiered. Large committees can be broken into subcommittees with the same sort of committee structure as the main committee. In other words, a committee member becomes the chair of the subcommittee in order to be its spokesperson during the main committee's meetings.
Subcommittees typically form when the main committee's agenda becomes too jam packed with items to discuss. When the meetings become inefficient, it's clear that some things may need to be figured out separately with the main conclusions brought back to the primary committee for discussion or approval.
Depending on the nature of the subcommittee, there may be no reason to have any other role besides the chair/president. However, if the subcommittee has long-term goals, then it can also have a secretary and treasurer appointed or elected.
Every Organization Is Different
The good thing about committees is that their bylaws and structure are completely flexible depending on the needs of a particular organization. Public corporations are simply required to have a board of directors and to have bylaws. What the actual bylaws say is up to you and your board of directors.
This gives you the flexibility to still run your corporation in a way that makes sense for you. Maybe you only need three directors (the minimum number required for a board of directors) because your organization is still small. Perhaps you want to vote on new directors every three years because your growth is currently slow. Maybe you want to create even more roles among your board of directors other than president, secretary, treasurer and chairs.
Your board has the ability to make these decisions as long as they are documented in the bylaws.