Executive Committee Vs Board of Directors
The executive committee is a subcommittee of board of directors. It is the organ of the organization’s governing body that supervises the management, establishes strategy and supervises its members. The members are elected by shareholders or members, and meet regularly to discuss the financial performance of the company, establish policies, and choose the top managers. It is also the governing body which ensures the compliance with good governance practices.
Executive committees, unlike the full board, are smaller groups that have close ties to their leaders. They are able to meet rapidly and at short notice in order to discuss major issues, for example, urgent workplace issues, high-level strategic decisions, or organisational supervision. They’re digital data room typically responsible for making sure that board members are aware of their roles and responsibilities and are the ones who lead in providing effective governance-related training. They could be accountable for choosing a new CEO or conducting reviews of CEO performance and reporting to the board.
The executive committee is ultimately the steering wheel of the board, deciding what matters it should put first. However, it is essential that the executive committee is fully transparent with the rest of board regarding its decisions and is in compliance with the board’s guidelines. It is suggested that to accomplish this, the executive committee should be a permanent committee of the board, with a fixed duration and formal timeframes. This allows all board members to determine when an issue has been dealt with by the executive committee as opposed to when it still requires the full board’s attention.
