How to Write a Committee Charter: Complete Guide with Examples

To regulate the board committee’s engagement in the board of directors operations, many organizations create committee charters. Such documents can be created manually or automatically with the help of board portals, which are also great tools for conducting virtual board meetings and establishing effective collaboration between board members.

Keep reading to learn about the board committee charter and how to create it. Additionally, get a template for a committee charter and a few examples.

What is a charter for a committee?

A committee charter is a particular document that defines committee members’ roles and responsibilities and ensures good governance. 

Reminder: Board committees are individual members of the board of directors who have been appointed to perform a specific task. For example, there can be a board development committee or ESG committee. They regularly report to the full board by providing recommendations for certain actions or decisions for the organization’s development.

The committee’s charter serves as a guideline for the board of directors. It includes information about the committee’s mission, its primary duties, the composition of a standing committee, and its specific procedures. 

Creating a charter for a committee helps to keep board committees actively involved in the governance and development process. It sets a direction for the committee members, establishes a legal framework within which they should operate, and identifies its boundaries and limitations.

Are charters required for every committee?

Such documents may not be obligatory for every organization. However, they are strongly recommended as this is a way to coordinate and monitor the committee’s engagement and responsibilities.

What is the purpose of the committee charter?

A charter for a committee plays a critical role in keeping board committees engaged in governance and development processes.

Specifically, by outlining the purpose, scope, and responsibilities, the document provides clear direction for committee members while establishing a legal framework within which they operate. It also defines boundaries and limitations so that members understand their roles and the extent of their authority.

Besides, this clarity encourages effective communication and organizational awareness, helping to prevent confusion or misunderstandings about the committee’s responsibilities.

Lastly, the charter is a reference point for resolving disputes by documenting all agreed-upon duties and procedures. It also provides a basis for evaluating the committee’s performance and guiding necessary improvements or adjustments to ensure the committee continues to operate effectively within its defined scope.

Developing the Сommittee Charter

Creating a committee charter is crucial in establishing strong governance practices within an organization. To ensure its effectiveness, the board should actively participate in its development. Typically, most organizations follow a process similar to how they create a board charter, which generally includes the following stages:

1. Governance meetings. The chair, CEO, company secretary, and committee members collaborate on the charter. They define the committee’s purpose and roles, ensuring they are consistent with the organization’s goals and values.
2. Charter draft. Members prepare an initial draft compiling all necessary information and details to structure the charter effectively.
3. Workshop and review. A committee reviews the draft together in a workshop setting. It allows for questions, discussions, and suggested revisions, making sure the final version incorporates everyone’s input.
4. Final approval. The completed charter is submitted to the board for approval. The board confirms that the document adheres to the organization’s governance policies and objectives.

Annual review. The committee and the board should review the charter annually and incorporate necessary updates or changes to stay relevant.

Benefits of board committee charters

In general, board committee charters improve the board management process. Here are the main benefits of creating committee charters:

• It helps all committees and board members stay on track with the organization’s overall direction and the duties of each committee board member.
• It orients new members of the committee to the general committee’s purpose, responsibilities, and limitations.
• It serves as a reference for disputes between other committees and reminds them of the legal framework they must operate in.  
• It provides a clear understanding of the committee’s existence within the organization and why committee meetings take place.

The must haves for a charter to a committee

A well-written committee charter states the purpose of the committee, its responsibilities, and instructions on the election and rotation of individual members. Though every organization needs its own committee charter templates, below is the list of the most common components of committee charters:

Now, let’s review the details of each component.

1. Mission statement

This section contains a clear description of the committee’s purpose. Here, you indicate why the committee is created, what goals it must achieve, and how this helps to reach the objectives of the entire organization.

2. Type of committee

This section defines what type of committee your organization creates. There are standing committees or special (so-called ad hoc) committees. 

Standing committees serve the organization’s specific needs on a regular basis. The main examples of a standing committee are the finance committee or governance committee.

Special committees are created for a certain period of time to fulfill specific tasks. For example, special committees can meet to review a particular company’s policy, perform an audit, or plan a special project.

3. Membership details

In the membership section, all the instructions on how to elect and rotate members are stated. Here, you should also indicate a committee chair, which is usually appointed by the board chair, and a co-chair. Additionally, state the information on how many members a committee must have.

4. Authority

This section of states what voting privileges the committee’s members have, whether they can take part in decision-making, and what operations can be delegated to this committee.

Many organizations also indicate how often the committee meets and whether physical presence is important.

5. Responsibilities

Naturally, this section contains descriptions of the committee’s duties and responsibilities — for each individual member and the overall committee.

Additionally, it contains information about how often the committee members should report to the board, who will host board meetings, and what documents are expected from the committee members.

6. Termination procedure

This section specifies whether any individual committee member can be terminated and under what circumstances. It describes the termination procedure and indicates whether there’s an appeal process in case committee members believe they’ve been terminated unfairly.

Tip: The committee charter is easier to create via specialized board portals. Most modern vendors offer ready-to-use templates for all key corporate documents, which automates this process. Learn how to choose the board portal for your needs on Board-room.org

7. Chairperson

The committee charter should define the procedure for selecting the chairperson. If the committee members are responsible for electing the chairperson, they should outline the election process in the document. The charter must also clarify the chairperson’s responsibilities, authority, and role within the committee.

This section should include information on how the chairperson and other positions (vice-chair or co-chair) are elected and term limits. Additionally, it should specify the vice-chair or co-chair’s role in assisting the chairperson and stepping in when the chair is unavailable.

8. Meetings

The meetings section outlines how the committee should conduct its meetings to ensure they are efficient and effective. It includes details such as meeting frequency, attendance expectations, quorum requirements, and the process for recording meeting minutes. Additionally, the document should cover protocols for managing disruptions during meetings.

Applying the charter’s structure: Charter examples for a committee

Before applying a committee charter to your organization, it’s helpful to review what other companies already have and perhaps use as a sample committee charter. Below are a few examples of how a it can look like for different industries:

1. Healthcare

• Governance Committee Charter by American Cancer Society.

Main components: Purpose of Committee, Membership, Authority and Responsibilities, Meetings, Reports, Evaluation.

• Patient Advisory Committee Charter by Edward-Elmhurst Health. 

Main components: Purpose, Scope, Benefits and Success factors, Responsibilities, Membership, Member Selection, Meetings, Other Patient Advisory Roles, Reporting. 

2. Education

• Academic Affairs Committee Charter by University of West Florida.

Main components: Purpose, Role, Duties, Specific responsibilities, Composition, Meetings, References.

• Audit and Finance Committee Charter by Corporate Finance Institute.

Main components: Purpose, Membership, Meetings, Duties and Responsibilities, Annual Evaluation, Executive Liaison.

3. Private companies and financial institutions

• Corporate Governance & Nominating Committee Charter.

Main components: Member Qualification and Selection, Meetings, Statement of Policy, Responsibilities and Processes, Reports to Board and Performance Evaluation

• Audit Committee Charter.

Main components: Purpose, Membership and Procedures, Duties and Responsibilities, Amendment.

4. Government

• Audit & Risk Committee Charter.

Main components: Purpose of Chapter, Committee’s Duties and Responsibilities, Committee Operations, Committee Governance.

• Scientific Integrity Committee Charter. 

Main components: Official Designation, Purpose and Scope, Functions, Membership, Member Roles, Responsibilities, and Procedures, Private-Sector and Inter-Governmental Agency Interface.

5. Nonprofits

• Executive Committee Charter.

Main components: Objectives, Composition and Appointment, Qualifications of the Executive Committee, Term of Office, Meetings, Duties and Responsibilities, Duties and Responsibilities in respect of the Right of First Offer and Right of First Refusal Agreement, Assessment of Performance.

• Development Committee Charter. 

Main components: Purpose, Organization, Committee Member Duties and Responsibilities, Meetings.

Template for a committee charter

When creating a board committee charter for the first time, everyone can experience troubles. That’s when a board committee charter template might help. Below is an example of how it can be written.

4 tips on how to write a committee charter

When writing a charter for a committee, follow these simple recommendations:

1. Be clear and specific. It’s crucial to write a committee charter in simple language every committee member will understand. It’s also important to clearly describe the committee’s tasks so that everyone knows what’s expected of them and performs efficiently.
2. Remember about bylaws. The board can form almost any rules and regulations for committees, but it’s essential to make sure they don’t conflict with the organization’s bylaws. It’s also advisable to have bylaws for nonprofit template (or for-profit).
3. Be flexible. You should be ready to apply any changes to the committee’s structure and committee charter. The organization’s direction can often change, new members join the committee, and others are terminated.
4. Be transparent. All the duties, responsibilities, and procedures of the committee should be transparent. This way, everyone can clearly see what’s required from them or how to behave should special circumstances arise.

Charter for the committee as a part of board management

The committee charter aims to define and monitor the operations of the board committee. With its creation, a board of directors can succeed in committee management and then in decision-making.

The creation of a committee charter and overall governance is even easier when using the board management software. These are specialized board portals created for a paperless board meeting with many additional features that help in planning meetings, storing corporate documents, and cooperating with other board members. 

At Board-room.org, you can find reviews of the most popular board portals with detailed descriptions of their features, pricing, and main advantages and disadvantages. The team at Board-room.org thoroughly investigates what each provider has to offer and puts every feature to the test. As a result, you get an honest opinion and the most truthful description of every vendor.

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FAQ

What should a committee charter include?

The components may vary depending on the particular organization but usually include such sections as the mission statement, type of committee, membership details, authority, responsibilities, and termination procedure.

What does a board committee charter provide?

A charter committee provides information on the purpose of the particular committee, its duties and responsibilities, structure, and specific procedures. It also provides instructions on how the election and termination should be held and how often a committee should meet. 

What is the difference between a committee charter and bylaws?

A board committee charter outlines the committee’s mission, authority, duties, structure, meeting schedule, minute-taking requirements, and procedures for reporting to the board. A corporation’s bylaws specify the standing committees the organization should establish. 

What is the difference between a charter and a terms of reference?

A charter is a formal document that defines a committee’s purpose, authority, and responsibilities. Terms of reference are more specific and operational. They detail the committee’s objectives, deliverables, timelines, membership, and processes for achieving its goals.