The Ten Commanders

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Strategy issues seen through cartoons.

Committees are often the butt of most jokes. But like them, or hate them, you just cannot wish them away. Everyone has one.

From industry committees making representations or recommendations to the government, to internal committees of companies that deal with everything from ESOPs to compensation plans or yearly budgets, business has always warmed up to the concept of committees.

Sarbanes Oxley norms, for instance, require companies to maintain an audit committee consisting entirely of independent directors.

"Committees help in bringing about a fairly representative point of view in a diverse business enterprise," says K Dorairajan, principal consultant, Eduserve Technologies, a Mumbai-based business solutions and consulting firm.

Agrees Anita Belani, country head, human capital, Watson Wyatt India, "In a global enterprise, committees help in getting a perspective across regions."

But, a committee's job is never easy. Members of any committee will tell you that getting a decision right means you are only doing your job. Get it wrong and you could be heading for a stalemate that deteriorates as time passes ""akin to an attempt at winemaking gone horribly wrong.

Professionals who have ever been on committees would agree that the other side of the coin is always a standoff. "You cannot run a war by committee," Dick Cheney, US vice-president famously said on his country sending troops to Iraq. That doesn't stop committees from being frequently at war amongst themselves.

Last year, Percy Mistry, a former World Bank economist and now an international consultant, stepped down as the head of the "High-Powered Expert Committee on Making Mumbai an International Financial Centre", just before the committee's report was to be tabled.

Mistry was reportedly miffed at the fact that certain public sector banking executives who were on his committee, wanted the report to tone down criticism of public sector banking operations.

It is not often that committees court trouble. Sometimes committees are even formed to resolve or prevent disputes. Take the recent case involving Indian biscuit maker Britannia Industries.

In May 2006, the company's board set up a high-level IPR (Intellectual Property Rights) committee to protect the group's biscuit brands like Tiger, Good Day and 50-50, among others.

It had a challenging task. Britannia's part-promoter, French dairy and beverages giant, Groupe Danone had gone ahead and allegedly registered Britannia's mass-market biscuit brand Tiger in 35 countries, without informing the Indian biscuit maker.

Based on the IPR committee's recommendations, Britannia last year dragged a Groupe Danone company Generale Biscuits to court in Singapore.

While the jury is out on Britannia's IPR committee, consultants say that the secret in running a successful committee begins right from deciding its composition. The first rule: do not have too many people on them. "If you have a very large committee then things can get out of hand," says Belani.

Then, you cannot have a committee for everything. Committees are probably good for compensation plans, but maybe not for creative pursuits or for driving innovation in a company. If you need a perspective for say, improving R&D it's best driven by a single individual.

It is also important to decide what are the objectives for the committee, set timelines and ensure compliance. A Mumbai-based consultant who has been involved in high-profile industry committees says that many times a standoff can be prevented by clarity in communication.

"Communication is the biggest force that keeps committees together," he points out. He recommends that the easiest way to achieve consensus in running committees is by first touching the points which the maximum number of members agree upon.

At times, committees, much like companies, run the risk of underperformance "" perhaps because they follow the guidelines too well. "Corporate boards should focus on performance, not conformance," says a Knowledge @Wharton article on how companies follow guidelines to such an extent that their performance gets affected.

If committees are subordinates of a company board, then that logic could apply to them as well. As the article indicates, companies with fewer shareholder restrictions outperformed those with more restrictions.

Of course, there are some strict no-nos. "A CEO must never be seen as someone driving the agenda of a committee," cautions Dorairajan, and adds that CEOs should not even be given powers to veto the decision of committees.

That perhaps explains why Wadia Group and Britannia Industries Chairman Nusli Wadia stepped down from Britannia's IPR committee.