CGOV.14:5.2 - A committee remit changes without amending the articles

In another constructed case, the current rules let the board establish an advisory committee and amend its remit by board decision, effective immediately. The committee advises on financial reporting. The board wants it also to examine the design of specified nonfinancial controls. No shareholder consent or external filing is required by the supplied rules; appointment and final board decision powers remain unchanged.

The board adopts the expanded remit through its required procedure and communicates the new wording. The amendment is effective. The committee’s members lack the relevant control-design competence, so the board also arranges qualified specialist support under its existing powers.

Once that support and necessary information are available, the committee performs the added advisory contribution. The changed charter alone did not supply the competence. The new contribution can inform a later board decision but does not make the committee the holder of that decision power.