A board of directors is an organization’s group of directors who manage strategic planning and take decisions in accordance with the company’s goals, vision, mission, and values. Boards are accountable for balancing the interests of shareholders while also ensuring integrity and planning for the future of the company.
An executive committee is a section of the board that is responsible for urgent matters and acts as a steering wheel for the board. It usually consists of three members: a treasurer, secretary, vice-chairperson, and a chairperson. The chairperson is the head of the committee, and is often the CEO, while the vice-chairperson helps the chairman, serves as a replacement for them when they’re not present and serves as a second-in-command. The secretary keeps minutes, keeps the calendar of committee members and ensures everyone has access to important documents.
By design an executive committee is a small group. They are more flexible and are able digital data room to meet on short notice to take decisions in urgent situations. This allows the board to concentrate their meetings on more important issues.
An executive committee can take on many repetitive matters and act as a substitute for the organization in instances that the board is not required to be present, for instance, the standard financial or legal procedures. It can also be used to evaluate controversial ideas and determine how the organization handles them before present them to the board. However, the committee should not be considered a second-tier power structure, and it’s a good idea to have clear delegated authority, as well as an internal set of checks and checks and balances.