Can boards delegate their duties to a board committee, or to management?
In many cases, yes, boards can delegate the above activities to others (such as a board committee, a management team, or an advisor) as long as they do so with care, loyalty, and good faith. But note that state corporation statutes often list actions to be performed by full boards alone (which may not be delegated to a committee). Actions which must be performed by the full board often include: • charter amendments • plan of merger or consolidation • sale, lease, or exchange of all the company’s assets; and • dissolution of corporation. Many other board responsibilities can be delegated to committees. Duties that must be accomplished through either the full board or through a board committee, include: • declaration of dividends • derivative litigation (If a shareholder wants the corporation to file a lawsuit the board or a board committee must approve this so-called “derivative” litigation) • compensation of directors • compensation of officers (Also see FAQ on Compensation) • election
