audit-compensation-committee-charter

name	audit-compensation-committee-charter
title	Audit & Compensation Committee Charter
description	Drafts a combined Audit and Compensation Committee charter for U.S. boards, tailored for public or private companies with listing-standard compliance, independence criteria, and SOX readiness. Triggers when the user needs a board committee charter, audit committee charter, compensation committee charter, or governance mandate for SEC/NYSE/NASDAQ compliance.
author	CaseMark
author_url	https://github.com/CaseMark/skills/tree/main/skills/legal/audit-compensation-committee-charter
license	Apache-2.0
version	0.1.0
execution_mode	open
jurisdiction	us
practice	corporate
language	en
tags	["agreement","drafting"]

Audit & Compensation Committee Charter

Draft a single charter establishing Audit and Compensation Committees with compliant authority, composition, and duties.

Gather Inputs

1. Company status (public / private / pre-IPO) and exchange (NYSE, NASDAQ, OTC, none).
2. State of incorporation and governance statute constraints (e.g., DGCL 141(c) [VERIFY]).
3. Existing charter, bylaws, committee charters, or board resolutions.
4. Board size, desired committee size, and applicable independence standard.
5. Auditor relationship, internal audit status, and financial reporting timeline.
6. Executive compensation structure, equity plans, employment/severance agreements.
7. Industry-specific regulatory overlays (financial services, healthcare, energy).
8. Whistleblower/compliance channels and meeting cadence expectations.

Charter Sections

Section	Content
Adoption & Authority	Board adoption statement, effective date, delegated authority; board retains ultimate fiduciary authority
Committee Structure	Separate Audit and Compensation Committees as standing committees
Membership & Independence	Minimum members, independence tests, appointment process, chair designation, term/rotation
Authority & Resources	Sole authority to retain advisors, funding, access to records/personnel, investigation authority
Meetings & Minutes	Quorum, voting, written consent limits, minutes, executive sessions
Responsibilities	Detailed duties per committee (see checklists below)
Reporting	Board reporting cadence, escalation triggers, required public reports
Evaluation & Review	Annual self-assessment, annual charter review, amendment process

Audit Committee Responsibilities

• Oversee financial statement integrity (annual and quarterly)
• Review critical accounting policies, estimates, and alternative treatments
• Appoint, compensate, oversee, and terminate the independent auditor
• Pre-approve audit and permissible non-audit services; document chair delegation
• Receive auditor communications under PCAOB standards
• Evaluate auditor independence and quality controls annually
• Oversee internal audit charter, plan, budget, staffing, and IA head
• Oversee ICFR and remediation of deficiencies