The Upside of Finance Committees and Why Firms Create Them

Boards of directors at U.S. firms are increasingly using finance committees featuring financial experts to oversee complex finance-related matters. Since 2003, most U.S. public firms have been required by NYSE and NASDAQ to have audit, compensation, and governance committees. Finance committees are the most common voluntary board committees in the U.S., and many influential firms (e.g., GE, Verizon, GM, Coca Cola, etc.) use or once used finance committees to handle complex financial issues. GE established a Finance & Capital Allocation Committee in December 2017, but Robert C. Pozen argues that GE should have adopted a finance committee much earlier and … Read more