Chapter 14 Committees in the Business Organisation

1.What is a Committee?

Committee is a group of people to which some matter is committed.

a) Ad hoc committee –temporary, specific purpose, solve short-term problems

b) Formal committee – part of organizational structure, specific delegated duties and authority

Characteristic of a committee:

a) Permanent

b) Have authority

c) Follow well established procedures

Features of a committee:

a) Rules of procedure

b) Chairperson or secretary

c) Committee papers and reports

d) Notice-announcement of meeting prepared and circulated in advance

e) Agenda-setting out what is to be discussed and in what order

f) Minutes of meeting which are official record of what has taken place

g) Have fairly rigid procedure about speaking, voting rights, proposing the motion and meetings, rights of attendance, agenda construction, quorum

1.1 The Rules of Procedure

Rules are designed:

a) To promote smooth running of a committee

b) To ensure that consistency and fair play are maintained

c) To enable both sides in an argument to state their case

d) To help to minimize the effect of bullying tactics

e) To ensure a proper record of all proceedings is kept

1.2 The size and success of a committee

Size of a committee:

a) Too large – insufficient time for individual to voice their view, but if everyone spoke it would waste valuable time

b) Too few – lack of breadth of expertise, decision may have insufficient deliberation

Successful committee should:

a) be representative of all interests

b) have a chairperson with the qualities of leadership to coordinate and motivate the other committee members, and the ability to handle the group firmly and fairly

c) choose suitable subjects for action, and make precise proposals by agenda

d) circulate reports prior to meeting

e) have clear cut terms of reference

f) have necessary skills and experience

g) be worth the cost of its operation

2.The purposes of committees in an organisation

a) decision-making

b) relaying decisions and instructions

c) brainstorming free exchange to generate new ideas and approaches

d) participative problem-solving

e) providing advice and information

f) consultation

g) act as delaying mechanism

h) oversee a function or procedure

3.Types of committees used in the organisation

Standing committees – for particular purpose on a permanent basis

Ad hoc committees - to complete a particular task

Audit committees - review the company’s accounting policies and internal controls, annual financial statements and the audit report with the company’s external auditors.

4.Examples of committees

4.1Board of directors

- group of people legally charged with the responsibility to govern a company

- elected by shareholders

- purpose is to :-

* lay down strategy, general policy and broad sectional policies

* ensure legal standards are met and accordance with its Articles of Association

* sanction capital expenditure and the method of disposal of profits

* ensure sufficient capital is available and maintain an efficient system

4.2 Steering committee

- oversee a major project ( IT based )

- its role is to :

• IT activities are in line
• provide leadership at senior level
• resource allocation decisions are effective
• co-ordinate requirements
• create the terms of reference for project team
• monitor the progress of various projects

4.3 Works safety committee

- an advisory committee

- it include :

• Human resources manager
• Safety officer
• Department representatives
• Works manager
• Union representatives

4.4 The Accounting Standards Board(ASB)

- setting accounting standards from the Accounting Standards Committee (ASC) in August 1990

- aim to promote consistency in corporate reporting by creating financial reporting standards

4.5 Ethics committees

- oversee the working practices and procedures in an organization with respect to :

• conflicts of interest
• confidential information
• complaints of customers
• transactions involving related parties of the company

5. The advantages and disadvantages of committees

Advantages

Responsibility are shared

Ability to undertake a larger volume of work

Decisions are based on a group’s assessment of facts and ideas

Pool talent, judgement and allows specialization

Improves coordination

Provides focal point for information and action

Improves communication

Disadvantages

Slower decision making

Decision may represent compromise solutions rather than optimum solutions

Waste time and resources

Managers may abdicate their personal responsibility for decision making

Some ‘experienced’ committee members may dominate

Excess procedural matters

Can not act quickly and flexibly

Advantages are particularly important in two respects :

sheer size and complexity of modem enterprises

growing pressures from all sections

Disadvantages can be overcome by:

Authority

Size

Membership

Subject matter

Minutes

-Cost effectiveness

6 The roles of the chair and the secretary of a committee

6.1 The chair

Resposiblities:

Keeping to schedule and agenda

Maintaining order

Ensuring correct procedure

Ensuring impartiality

Summing up or putting the issue to vote and declaring result

Checking and signing the minutes

Must have:

Decisive skills

Ability to silence people in friendly but firm manner

Skill in communicating clearly and tactfully

Skill of summarising

Awareness of non verbal behaviour

Knowledge of relevant regulations

6.2 The Secretary

Resposibilities:

Before the meeting –

Fix date and time
Book venue