Unlike listed companies, which must, by law, have certain internal committees in place to manage their governance and compliance obligations (for example to handle auditing of finances and accounts, and the remuneration of staff – including bonuses), small businesses are not required to have internal committees set up.
You might want to do this, for example, where you're working on a particular project that falls outside of daily team activities and you're keen to set measurable targets and potentially also incentives for this project. Staff may be required to commit a designated amount of their time to this project.
What do you need to appoint an internal committee?
Proposing the committee to the directors.
Setting out the type, scope and composition of the committee, as well as who you intend for its members to be.
3. A draft committee constitution
Setting out the objectives and targets for the committee, as well as its proposed membership.
How to appoint an internal committee
This is very much an internal matter for your company.
Provided that there is sufficient agreement between the directors (and unless your articles of association say otherwise, a simple majority view would suffice here), you can simply follow the order of the items listed above and put your internal committee into action.
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