Simon Rumore, Peakstone Global Managing Director and Co-founder
Member of the Global Policy Committee for the International Committee of Corporate Governance
Effective corporate governance is the backbone of organisational success, with board committees playing a crucial role in ensuring that boards operate with strategic focus and efficiency. However, too often, committees are underused, leading to gaps in oversight, duplication of efforts, and missed opportunities for deeper strategic discussions. Boards must rethink how they leverage committees to sharpen decision-making, enhance governance, and drive long-term value creation.
The role of committees in enhancing board effectiveness
Board committees help boards manage their growing responsibilities by providing detailed scrutiny on key areas including:
- Audit and finance
- Risk and compliance
- Nominations and remuneration, and
- Strategy and growth.
When structured and used effectively, committees allow boards to make informed decisions without getting lost in operational minutiae.
Boards need to ensure committees are not just compliance-driven but are genuine enablers of strategic oversight and decision-making. This means clarifying committee mandates, eliminating redundancies, and ensuring seamless collaboration between committees and executive management.
Avoiding gaps and overlaps in committee delegation
One of the most common governance pitfalls is the misalignment between committee delegation and what remains within the purview of the board or management.
Without clear delegation, boards risk duplicating efforts or, even worse – missing critical oversight responsibilities.
Gaps in delegation lead to overlooked risks, while overlaps can cause inefficiencies and confusion. For example, when both a board and a risk committee review and discuss the same strategic risk or opportunity, accountability may be diluted rather than enhanced. The key is to define committee responsibilities clearly and ensure they operate within a well-structured governance framework.
I’m a strong advocate for regular board evaluations and structured governance reviews to ensure alignment. Effective boards take a proactive approach to committee structures, ensuring they evolve in response to emerging risks, regulatory changes, and strategic imperatives.
Strategic alignment: using committees to drive boardroom discussions
To truly unlock the value of committees, boards must ensure strategic priorities are aligned rather than operating as isolated decision-making silos. The most effective committees:
- Have charters that explicitly link their mandates to the organisation’s strategy.
- Provide the board with forward-looking insights rather than just backward-looking compliance reports.
- Encourage deep-dive discussions on key risks and opportunities that impact long-term performance.
- Maintain a structured but flexible agenda that allows for responsiveness in addressing emerging trends.
A leading practice is to conduct annual committee performance assessments to determine whether committees are adding value or merely fulfilling a procedural function. This strategy aligns with Peakstone Global’s view that “good governance is dynamic, not static”.
Moving forward: enhancing committee effectiveness for better board decisions
Boards need to take a disciplined approach to committee effectiveness. This includes ensuring that committees:
- Have clear mandates – Avoid ambiguity in committee charters and ensure alignment with board and management responsibilities.
- Operate with efficiency – Ensure committees do not become bottlenecks but, instead, enable decision-making.
- Encourage diverse expertise – Appoint members with the right mix of skills, experience and independence.
- Regularly review performance – Conduct periodic committee evaluations to assess impact and refine focus.
- Facilitate cross-committee collaboration – Foster better communication between committees and the board to ensure seamless governance.
With corporate governance standards evolving, the role of committees in supporting boards across all sectors and industries to make timely and well-informed decisions has never been more critical. By optimising committee structures and clarifying delegation lines, boards can enhance governance effectiveness and position their organisations for long-term success and sustainability.
