Which statement correctly reflects the minimum number of committees required and their typical composition in corporate governance?

Which statement correctly reflects the minimum number of committees required and their typical composition in corporate governance?

• A. At least two committees must be in place, including Audit and Remuneration.
• B. Committees are optional for smaller entities.
• C. At least four committees must be in place, including Audit, Remuneration, Risk, and Nominations.
• D. There must be exactly four committees, with no exceptions.

Answer: (C)

Separate committees focused on key governance areas provide independent oversight beyond day-to-day management. The minimum number is four, consisting of Audit, Remuneration, Risk, and Nominations. The Audit committee oversees financial reporting and internal controls, the Remuneration committee sets executive pay policy, the Risk committee monitors the risk management framework, and the Nominations committee handles board appointments and succession. This structure ensures specialized scrutiny and accountability in important areas, which is why four is the standard minimum. Some organisations may have more committees or combine duties in smaller entities, but the four-component arrangement is the typical minimum.

Separate committees focused on key governance areas provide independent oversight beyond day-to-day management. The minimum number is four, consisting of Audit, Remuneration, Risk, and Nominations. The Audit committee oversees financial reporting and internal controls, the Remuneration committee sets executive pay policy, the Risk committee monitors the risk management framework, and the Nominations committee handles board appointments and succession. This structure ensures specialized scrutiny and accountability in important areas, which is why four is the standard minimum. Some organisations may have more committees or combine duties in smaller entities, but the four-component arrangement is the typical minimum.