Executive Committee Vs Board of Directors

The executive committee is the subcommittee to the board of directors. It is the organization’s governing organ that oversees the management, establishes strategy and supervises its members. The members are chosen by members or shareholders. They meet on a regular basis to assess the financial performance of the company and to set policies, as well as select the top management. It is the governing body which ensures that proper governance procedures are followed.

Executive committees, in contrast to the full board, are smaller groups that are closely connected to their leaders. They can meet quickly and at short notice in order to discuss major issues, for example, urgent issues in the workplace, high-level strategic decisions, or organisational supervision. Typically, they’re also responsible for ensuring that board members are aware of their roles and responsibilities. They also provide effective training on governance practices. They may be responsible for appointing a new CEO, conducting reviews of CEO performance and reporting to the board.

The executive committee is the board’s steering wheel, giving priority to issues that the board should be addressing. However, it is important that the executive committee be completely transparent with the rest of the board regarding its decisions and respects the www.boardroomsupply.com/executive-committee-vs-board-of-directors/ full board’s guidelines. To achieve this, it is suggested that the executive committee is a permanent committee of the board with a fixed term of office and formal terms of reference. This will allow the entire board to know when an issue has been dealt with by the executive committee versus when it still requires the full board’s attention.

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