Director FAQ - Special Committees

Boards form special committees to supplement the work of standing committees by providing focused, independent attention to specific issues, typically temporarily (in which case they may be called ad hoc committees). Special committees may be formed in response to significant events such as mergers, litigation, or internal investigations, but their utility is broader. This Director FAQ discusses the logistics of establishing, managing, and concluding or extending the work of special committees.

Q: What are special committees and when and how should boards establish them?
A: Special committees are board committees established to study and make recommendations on one or more current issues requiring independent study and oversight. They are typically temporary or ad hoc committees used for events outside the ordinary that require review by independent directors (often along with advisors), such as proposed M&A transactions, major litigation against the company, or internal misconduct investigations. In fact, however, they can be considered for any situation or issue requiring independent board-level review, and they can be established as permanent committees for any such reviews. This FAQ will cover the following aspects of special committees:

1. Introduction

2. Areas That Can Be Covered by Special Committees

3. Establishing (and Dissolving or Extending) a Special Committee

4. Minutes and Other Documents From Special Committees

5. Questions for Directors to Ask About Special Committees

6. Additional Resources

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