What Do Board Committees Actually Do? Insights from the Chair of a Growth-Focused Committee

Behind the scenes: Have you wondered what a board committee actually does? Today I want to shed some light on this.

When I got appointed to the board of Hapimag last year, I also joined the Customer and Product Committee (or short CPC). And since this May, I am chairing our CPC.

Typically, proper boards have at least two committees (or ‘Ausschüsse’ in 🇩🇪):

The Audit Committee (AC), responsible for ensuring that all of the company’s finance and legal matters are in order. The AC reviews and approves budgets, evaluates major investments and appoints the auditor (an external company dual-checking all the numbers).

The Nomination and Compensation Committee (NCC) that oversees all highest-level HR matters. It searches for and proposes a new CEO to the board, defines the C-level compensation, and proposes new board members if the company needs one.

At Hapimag, we also have a third board committee, the aforementioned CPC.

We have this additional function because growth is a topic very central to our agenda and so we believe it should receive specific board attention.

The areas our CPC oversees are:

🧑‍🧑‍🧒‍🧒 Customer understanding
📈 Shareholder acquisition & retention
💻 IT/AI landscape
🏖️ Customer experience.

We see all of these essential to re-ignite Hapimag’s growth. And we’re proven right: last year was the first year we grew the number of active shares again since 2010 (!).

Committees typically meet once per quarter and consist of selected board members, ExCo, those members of the management team responsible for the above areas and sometimes (as in our case) external advisor experts.

What I found interesting is that committees per se have no decision-making power; they rather support the operational function and prepare any decisions that are going to the full board – this is where decisions are made. We actually have a clear functional chart that outlines exactly who is allowed to make what decisions and on this guideline the board is always the top-level instance.

I love the CPC work as it is a great bridge between high-level operational discussions and very directional strategic board tasks. Sometimes it is challenging to keep the right flight level, but I believe we are doing a good job 😀.

The preparation is meticulous — from agenda setting to the preread documents, that are often 25+ pages long, ensuring that every member of the CPC enters the discussion with the right information. Of course there are also detailed minutes post-meeting.

I believe that any company that has a very specific focus topic such as growth at their heart should consider implementing such an institution. We for sure benefit from it.