Give a board committee a clear authority record before it acts

Write down the decisions the proposed group will make and whether it is expected to exercise board authority or only recommend action. A team that gathers information is different from a committee authorized to approve a transaction. Give counsel the proposed membership, purpose and reporting arrangement before circulating a charter.

Delaware section 141(c) addresses board committees composed of directors and their delegated powers. Its rules depend in part on the corporation's date of incorporation and applicable elections. Have counsel identify the controlling provision and review the certificate, bylaws and any earlier committee resolutions.

Prepare a proposed authority schedule for the board's review. Describe the matters the committee may approve, those it may investigate or recommend, and those reserved to the full board or stockholders. Identify any time, transaction or other limit chosen for this mandate without inventing a standard limit for all committees.

Section 141(c) places statutory boundaries on committee power, including restrictions involving bylaws and specified matters requiring stockholder approval. Counsel should reconcile those boundaries with the proposed mandate. A broad phrase such as all necessary authority should not conceal an action the committee cannot take.

Have the authorized body adopt the final delegation and appointments through a valid process. Retain the adopted resolution with the committee charter and reconcile the member list to the directors actually serving. A draft charter in a shared folder is not the appointment record.

Ask counsel to confirm quorum, voting, alternate-member and subcommittee provisions under the governing documents and section 141. Give the committee secretary the approved rules and a contact for questions. If a member resigns or becomes unavailable, resolve replacement authority before treating another attendee as a voting member.

For a committee agenda, identify the provision authorizing each decision and the documents members need. Flag anything outside scope before the meeting. The committee can refer that matter to the proper body while still completing the work it is authorized to do.

Record the materials considered, participants, conflicts addressed and action taken in the committee's own record. Preserve any full-board or stockholder approval separately. A recommendation, a committee approval and a later board approval should remain distinguishable so implementers know which event authorizes the next step.

If the transaction expands or the committee's membership changes, ask whether its mandate needs a new approval. Keep superseded versions as history and identify the operative version by adoption date. Tell the people relying on the delegation when its scope changes or ends.

At completion, deliver the committee's decisions and supporting record to the corporate custodian. The file should show who was authorized, what they could decide and how the particular action fit that authority. This makes the delegation useful beyond the meeting in which it was created.