Business Corporation Board Committee Creation and Delegation in Tennessee
At a glance
| Law and committee scope | Business Corporation Act § 48-18-206 covers board-created committees; director-only membership applies to a committee exercising board powers. |
|---|---|
| Creation and approval | Board creates unless charter or bylaws provide otherwise; creation and appointments need greater of majority of all directors in office or charter/bylaw § 48-18-205 action number (§ 48-18-206(a)–(b)). |
| Membership and appointment | One member suffices; each member of a committee exercising board power must be a director and serves at board pleasure; board appoints under special vote rule (§ 48-18-206(a)–(b)). |
| Alternates and changes | Members exercising board power serve at board pleasure; committee cannot fill its or board vacancies; § 48-18-206 states no alternate or temporary-substitution mechanism (§ 48-18-206(a), (e)(2)). |
| Delegated authority | Committee may use board authority only to extent board, charter, or bylaws specify; directors retain conduct duties despite delegation (§§ 48-18-206(d), (f), 48-18-101(b)). |
| Actions reserved elsewhere | Committee cannot set distributions or share reacquisitions except by board formula/method, fill vacancies, change bylaws, or authorize share issuance/rights except within specific board limits; § 48-18-206(e) does not separately list merger or shareholder-vote categories. |
| Subcommittees | § 48-18-206 addresses board-created committees but gives them no express subcommittee-creation or redelegation power. |
| Procedure and oversight | Board meeting, consent, notice, waiver, quorum and vote rules apply to committees; ordinary quorum is majority of fixed/prescribed seats, reducible by charter/bylaws to one-third; majority present acts with quorum. Written action follows § 48-18-202; delegation alone does not satisfy director conduct standard (§§ 48-18-206(c), (f), 48-18-205(a)–(c)). |
Requirements one by one
Creation and membership
Under § 48-18-206(a)–(b), the board can create one or more committees unless the charter or bylaws say otherwise. One member is enough, but every member of a committee using board power must be a director. Creation and appointment require the greater of a majority of all directors in office or the charter/bylaw number required for board action under § 48-18-205. For example, a five-director board ordinarily needs at least three affirmative votes even if a smaller meeting quorum exists.
Delegated power and limits
Under § 48-18-101(b), the board directs corporate affairs, subject to charter limits. Under § 48-18-206(d), committee authority reaches only as far as the board, charter, or bylaws specify. Under § 48-18-206(e), a committee cannot fill board or committee vacancies or change bylaws. It also restricts distributions and share reacquisitions to a board-prescribed formula or method, and permits share issuance and class-right decisions only within specific board-prescribed limits. The section does not give a committee an express subcommittee-creation power.
Committee procedure
Under § 48-18-206(c), the statute applies board meeting, consent, notice, waiver, quorum and voting rules to committees. Under § 48-18-205(a)–(c), the ordinary quorum is a majority of fixed or prescribed seats; the charter or bylaws may lower that to at least one-third, and a majority of members present acts when quorum exists. Written consents under § 48-18-202(a) must record each member's vote or abstention and be kept in the minutes or records. Delegation alone does not meet a director's conduct standard under § 48-18-206(f).
What trips people up
Under § 48-18-206(e)(5), a board may authorize a committee to issue shares only within limits the board specifically prescribes. A broad authorization without those limits does not meet that stated exception.
Common questions
Can a committee member abstain on written action? Yes. Under § 48-18-202(a), every member must sign the consent, but each may record a vote or abstention; the ordinary affirmative-vote threshold still applies.
How can a present committee member record dissent? Under § 48-18-205(d), an objection at the start, an entry in the minutes, or a timely written notice can avoid the statutory presumption of assent.
Statutes and sources
- Tenn. Code Ann. § 48-18-206 — committee creation, authority, exclusions and oversight; accessed October 4, 2026.
- Tenn. Code Ann. § 48-18-101 and § 48-18-205 — board authority and voting; accessed October 4, 2026.
- Tenn. Code Ann. § 48-18-202 — written action, 2012 reenactment; accessed October 4, 2026.
Source links
Every statute quoted above, linked, with the date we checked it.
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