Financial Risk Manager Part 1

The primary reason for the formation of board committees within a company is to enhance the overall effectiveness of the board. The board of directors in a company is responsible for making key decisions and setting the strategic direction of the company. However, the board is often comprised of individuals with diverse backgrounds and expertise, and it can be challenging for the board to effectively manage all aspects of the company's operations. Therefore, board committees are established to help streamline decision-making, provide specialized oversight, and ensure that critical areas—such as finance, audit, governance, and compensation—are managed efficiently and effectively. This structure enhances the board’s ability to fulfill its responsibilities without being overwhelmed by the breadth of operational matters.