Composition and

Responsibilities of the Board

Committees
 Who are the Board of Directors ?

 A group of individuals, elected to represent shareholders.

 A board's mandate is to establish policies for corporate management.
 Oversight, making of decisions on major company issues.
 Collectively directing the company's affairs, whilst meeting the appropriate
interests.
 The directors must act with honesty, diligence, and prudence in the course of
their term.
 Board Committees

 A committee is a body of one or more persons that is subordinate to a

deliberative assembly.
 Board Committees are groups which deal with specific tasks for which the board
is responsible, but doesn’t have enough resources to spare
 Such committees deliberate on the matter referred by the Board and helps
prepare groundwork for decision-making to be carried out at the subsequent
Board Meeting.
Composition & Responsibilities

 Audit Committee
 Shareholder’s Grievances Committee
 Nomination Committee
 Management Committee
 Renumeration Committee
 Audit Committee

 Statement of Purpose- To oversee the relationship with external auditors and ensure quality of
company’s financial statements.

 Composition:
 Of the total number of members as the Board may determine, 2/3rd shall be directors not
less than 3, other than MD or WHD.
 The members of the committee shall elect a chairman from amongst themselves.
 All members should be financially literate and at least one should have accounting or
financial expertise.
Audit Committee

 Responsibilities:
 Review and Report to the board on the most critical accounting policies.
 Provide a link between internal and external auditors.
 Appointment, Retention and Renumeration of external auditors.
 Managing significant risks and exposures in policies.
Nomination and Renumeration
Committee (NRC)

 Statement of Purpose- A nomination committee shall evaluate the board of

directors, examine their skills and suggest renumeration for the same.

 Composition:
 3 or more non-executive directors out of which not less than ½ shall be
independent directors.
 The chairperson of the company, be appointed as a member of the NRC but
should not chair such committee.
Nomination and Renumeration
Committee (NRC)

 Responsibilities:
 Identify persons who are qualified to become directors and may be
appointed in senior management.
 Recommend to the Board their appointment and removal.
 Carry out evaluation of every director’s performance.
 Recommend to the Board a policy, relating to the remuneration of
employees.
Other Impt. Board Committees

 Executive Committee- The members of the Executive Committee are often on that
committee due to the position they hold within the organization. It reviews the decisions
taken by the board and takes follow up action on the company’s operations or systems.
 Governance Committee- New board members not only need to know about the
organization and its programs, finances, and plans for the future. But also, need to know
how the board itself operates.
 Shareholder’s Grievances Committee- To redress shareholder’s and depositor’s complaints
and any other responsibilities as may be entrusted by the Board.
 Management Committee.
What else….

Over the past 30 years, board committees have been streamlined. The BoD
is now looking for a much more flexible way to manage their workload while
adjusting to the evolving needs.
Which is why, apart from the role that they play or their place in the
organization, board committees have started being segmented on the basis
of structure like Zero-based or Ad Hoc. This helps them decide how the
decision flow should take place and if they do need committees at all.