Business Corporation Board Committee Creation and Delegation in Arkansas
At a glance
| Law and committee scope | Arkansas Business Corporation Act § 4-27-825 (1987 Act 958 § 64-817); corporations with a board; ≤50-shareholder article-based board opt-out under § 4-27-801(c). |
|---|---|
| Creation and approval | Board creates/appoints unless articles/bylaws provide otherwise; greater of in-office director majority or article/bylaw action number (§ 4-27-825(a)-(b)). |
| Membership and appointment | At least two directors, appointed by board; members serve at board pleasure (§ 4-27-825(a)). |
| Alternates and changes | Members serve at board pleasure; § 4-27-825 gives no alternate/substitute route; committee cannot fill board or committee vacancies (§ 4-27-825(a), (e)(3)). |
| Delegated authority | Board, articles, or bylaws specify extent of board authority; delegation alone does not establish director-conduct compliance (§§ 4-27-801(b), -825(d), (f)). |
| Actions reserved elsewhere | No distributions, shareholder-required acts, vacancies, charter amendments, bylaws, or merger plans needing no shareholder vote; share reacquisition only by board formula/method, issuance/class terms only within specific board limits (§ 4-27-825(e)). |
| Subcommittees | § 4-27-825 authorizes board-created committees but gives no express committee-created subcommittee or redelegation route. |
| Procedure and oversight | Board meeting/consent rules apply; majority quorum/vote defaults with one-third quorum floor, unanimous written consent, permanent committee-action records, director-conduct caveat (§§ 4-27-821, -824, -825(c), (f), -1601(a)). |
Requirements one by one
Creation and membership
Under § 4-27-825(a)–(b), an Arkansas board may create a committee and appoint its members unless the articles or bylaws provide otherwise. Each committee needs two or more directors, who serve at the board's pleasure. Creation and appointment require the greater of a majority of all directors in office or the article/bylaw number for board action. Section 4-27-801(c) separately lets a corporation with 50 or fewer shareholders limit or dispense with a board by describing in its articles who performs board duties; the committee rule presupposes a board to create one.
Delegation and reserved acts
The board, articles, or bylaws specify the reach of committee authority (§ 4-27-825(d)). Subsection (e) prohibits distributions, shareholder-required action, filling board or committee vacancies, specified charter amendments, bylaw changes, and approval of a merger plan not requiring shareholder approval. Share reacquisition is permitted only under a board-prescribed formula or method. The board may allow share issuance, sale, or class/series terms within specifically prescribed limits. Subsection (f) says delegation or committee action alone does not establish a director's conduct compliance.
Procedure and records
Section 4-27-825(c) applies board meeting, consent, notice, and quorum/vote provisions to committees. Section 4-27-824 ordinarily requires a majority quorum and a majority vote of directors present, subject to document variation and a one-third quorum floor. Section 4-27-821 ordinarily permits action without a meeting through all directors' written consent. Section 4-27-1601(a) requires permanent records of committee actions taken in the board's place.
What trips people up
Section 4-27-825 contains no alternate or temporary-substitute power; it says members serve at the board's pleasure. Its bar on a merger plan not requiring shareholder approval is separate from its bar on action that the chapter requires shareholders to approve. The share-issuance exception needs limits specifically prescribed by the board.
Common questions
May one director serve as the entire committee?
No. Section 4-27-825(a) requires two or more director members.
Can a committee set the terms of a share class?
Only within limits specifically prescribed by the board under § 4-27-825(e)(8), and only to the extent the committee has been given authority under subsection (d).
Statutes and sources
- Ark. Code § 4-27-801 (1987 Ark. Acts 958, § 64-801) — Arkansas Legislature. Accessed 2026-09-26.
- Ark. Code § 4-27-821 (1987 Ark. Acts 958, § 64-813) — Arkansas Legislature. Accessed 2026-09-26.
- Ark. Code § 4-27-824 (1987 Ark. Acts 958, § 64-816) — Arkansas Legislature. Accessed 2026-09-26.
- Ark. Code § 4-27-825 (1987 Ark. Acts 958, § 64-817) — Arkansas Legislature. Accessed 2026-09-26.
- Ark. Code § 4-27-1601 (1987 Ark. Acts 958, § 64-1601) — Arkansas Legislature. Accessed 2026-09-26.
Source links
Every statute quoted above, linked, with the date we checked it.
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