As a result of the increasing and ever-evolving responsibilities
falling on the shoulders of boards of directors, the traditional
three key committee model (covering audit and financial reporting,
executive compensation, and director nominations and board
succession planning) can be inadequate. The creation of additional
committees has been one way to manage the burden. According to EY
in its recent Board Matters post entitled "Board committees
evolve to address new challenges", the prevalence of
additional committees reflects "changing board priorities and
pressures, boardroom needs and company circumstances."
The statistics support this: more than 75% of S&P 500
companies have at least one additional board committee, up from 61%
in 2013. A review of the S&P SmallCap 600 board committee
structure reveals that 46% of smaller companies have at least one
additional board committee. A review of EY's findings is
summarized in more detail below.
