Chapter 14

Committees in the business organisation

Chapter Outline

COMMITTEES

ROLE & PURPOSE TYPES

CHAIRPERSON & SECRETARY

DISADVANTAGESADVANTAGES

Committees

• Within an organisation, committees can consist entirely of executives or may be instruments for joint consultation between employers and employees.

• They are a key part of organisational communication processes.

Definition: Committee

• A group of people to which some matter is committed

• 2 types:1. Ad hoc2. Formal committee

• Committees:– Are permanent– Have authority– Follow well established procedures– Provide a well tried way of resolving difficult

decisions

Features

FEATURESRules of

procedure

Chairperson & secretary The minutes of the

meeting which are the official record of what has taken

placeCommittee papers &

reports to help committee make well informed decisions or

proposals

Notice – announcement of the meeting prepared & circulated in advance

Agenda setting of what is to be

discussed & in what order

Features cont…

• Rigid procedure about:– Speaking– Voting rights– Proposing the motion & meetings– Rights of attendance– The construction of the agenda– Adding emergency items to the agenda– Quorum (minimum no of members required

for the meeting to take place)

Rules of procedure

• To promote the smooth running of a committee

• Ensures consistency & fair play

• Enable both sides in an argument to state their case

• Minimises the effect of bullying tactice

• Ensures proper record of all proceedings are maintained

Rules of procedure

• Convening meeting acc. to. Articles of Association• A meeting may only proceed if it has been properly

constituted – meets all the criteria laid down regarding attendance & conduct.

• If there is no quorum, the Chair has 2 options:1. To make the meeting a discussion group2. To adjourn the meeting to a later date

• Procedures may also be defined regarding the conduct of the meeting. Each item of business may be required to be put before the meeting as a proposal or a motion. This usually requires a proposer & a seconder. If it is carried (approved), the motion becomes a resolution (decision).’

Rules of procedure• The original motion is sometimes amended and

may then be carried in an altered form as a ‘substantive motion.

• An amendment is a proposal to alter a motion that has been put before a meeting, but has not yet been put to a vote.

• An amendment which simply adds words to the original motion is called an addendum.

• Participants will then vote for or against a motion

Rules of procedure

• A point of order is an objection about a perceived irregularity in the convening, constitution or conduct of the meeting. It is made to the chairperson, who makes an immediate ruling. PoO, ensures that regulations are observed.

• Procedures re who is permitted to speak (proxies?)

Size and success of a committee

Size:

• Too large a committee may not give individuals time to give their point of view but if everyone spoke it would waste time

• Too few in the group may mean a lack of breadth of expertise, or decisions may be made with insufficient deliberation.

Size and success of a committee

Success:• Be representative of all interests• Have a chairperson with good leadership

capabilities• Choose suitable subjects for action• Circulate reports prior to meeting• Have clear cut terms of reference, with areas of

responsibility, timescales of operations & purpose specified in writing

• Have the necessary skills & experience• Be worth the cost of its operation

The purposes of committees in an organisation

TASKS

RELAYING DECISIONS &

INSTRUCTIONS

BRAINSTORMINGPROVIDING ADVICE &

INFORMATION

DECISION MAKING

PARTICIPATIVE PROBLEM-SOLVING

CONSULTATION

Types of committees used in the organisation

• Standing – formed for a particular purpose on a permanent basis

• Adhoc – are formed to complete a particular task

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

Examples of committees

1. Board of Directors – group of people legally charged with the responsibility to govern a company

Purpose:– Lay down strategy, general policy & broad sectional

policies– Ensure legal standards are met & the company is

operating in accordance with its Articles of Association

– Sanction capital expenditure & the method of disposal of profits

– Ensure sufficient capital is available & maintain an efficient system to control the affairs of the company

Examples of committees

• Steering committee – oversee a major project, generally IT based, within an organisation. Involved in deciding how to allocate scarce IT resources.

• Role:• Ensure that all IT activities are in line with the strategic

plans of the org• Provide leadership at senior level for the exploitation &

management of IT• Ensure that resource allocation decisions are effective• Co-ordinate requirements in any org restructuring • Create the terms of reference for the project teams• Monitor the progress of the various projects

Work safety committee

• Advisory committee, which meets regularly to discuss action required about unsafe working conditions/methods

HR mangerWORK SAFETY

COMMITTEEWorks

manager

Safety manager

Department representatives

Union representatives

The Accounting Standards Board (ASB)

• ASB took over the role of setting accounting standards from the Accounting Standards Committee (ASC) in August 1990.

• Aims to promote consistency in corporate reporting by creating financial reporting standards to which major businesses are expected to adhere

Ethics committees

• Oversees the working practices & procedures in an organisation with respect to:– Conflicts of interests– Confidential information– Complaints of customers– Transactions involving related parties of the

company

Advantages & Disadvantages of committees

Advantages Disadvantages

Responsibilities are shared

Slower decision-making

Ability to undertake a larger volume of work

Decisions may represent compromise solutions rather that optimum solutions

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

Waste time & resources

Pools talent, judgement & allows specialisation

Manager’s may abdicate their personal responsibility for DM

Advantages & Disadvantages of committees cont…

Advantages Disadvantages

Improves coordination between work groups

Some experienced committee members may dominate

Provides a focal point for information & action within org

Excess procedural matters reduces the time available for the discussion of substantive matters

Improves communication

Cannot act quickly & flexibly to meet sudden changes in situation

How to overcome pitfalls of committees

• Authority – clear lines of authority & responsibility

• Size – committees should be large enough to promote deliberation & include the breadth of expertise required for the job but not so large as to waste time or foster indecision

• Membership – careful selection of members. Members must be representative of the interests they are intended to serve & must also possess the required authority and be able to perform well in a group.

How to overcome pitfalls of committees cont…

• Subject matter – should be limited to subject matter that can be handled in a group discussion

• Minutes – careful minutes of meeting must be taken & circulated in draft form for correction or modification before the committee approves the final copy

• Cost effectiveness – committees can be justified only if the costs are offset by tangible & intangible benefits.

Roles of the chair & secretary of a committee

• One person at the meeting will act as chairperson & guide the proceedings

• Responsibility:– Keeping the meeting to a schedule & to the agenda– Maintain order– Ensuring correct procedure is observed– Ensuring impartiality– Ascertaining “the sense of the meeting”, by summing

up, or putting the issues to a vote & declaring the result

– Depending on the level of formality of the meeting – checking & signing the minutes

Skills and knowledge• Effective chairperson must have:

– Sound knowledge of relevant regulations– An awareness of non-verbal behaviour– Ability to summarise– Skill to communicate rulings clearly but tactfully– Ability to silence people in a firm & friendly manner– Ability to be decisive– Ability to ask opening

questions

Secretary

Before the meeting

•Fixing the date & time of the meeting•Booking the venue•Preparing & issuing the agenda & other relevant documents

During the meeting

•Assisting the chairperson

•Making notes

•Advising the chairperson on points of procedure

After the meeting

•Preparing minutes

•Acting on & communicating decisions

•Dealing with correspondence