Shawn proposes, or suggests a plan, to form two committees.

The verb "to form," here, means to create, or to make.

It can also be used to mean to build something - to make it bigger.

You might form, or create, a club or an association in your community.

A "committee" is a small group of people that works on a specific project, usually in an office or in an organization.

Sometimes it is difficult to have large groups of people all trying to work on something, so businesses often have committees do the work instead.

These are smaller groups of people.

There are sales committees, marketing committees, technology committees, and so on.

Shawn proposes forming two committees, or making two small groups "to focus on the major outstanding issues."

If something is "outstanding," we mean that it is continuing or ongoing, something that is not yet finished.

That's one use of the word "outstanding," the word "outstanding" can also be used to mean great or wonderful.

Someone who is the best in their area would be "outstanding."

Here it means not finished - not completed.

The people at this meeting, that we have been listening to, have not decided how they are going to change the marketing campaign or the product, so these are still outstanding issues - they aren't finished yet.

Shawn asks Hannah to head the first committee.

"To head" (head) something means to lead or to be in charge of something.

Shawn is asking Hannah to be the leader of the committee.

A president of a company heads her business; that's because she is the leader, she is the one who takes care of or is in charge of.