Executive Committee Vs Board of Directors

A board of directors is a group of individuals within an organization that oversees strategic plan and decision-making in line with their vision, goals, values, and mission. They are accountable to balance shareholder interests, ensure integrity, and plan for the future of the company.

An executive committee is a section of the board that is responsible for urgent issues and acts as an instrument for the board. It is typically comprised of a secretary, treasurer, vice-chairperson, and a chairman. The chairperson is usually the leader of the committee and often the CEO The vice-chairperson assists the chairman, acts as a substitute for them when they are not present and serves as the second-in-command. The secretary maintains minutes, maintains the committee calendar and ensures everyone has access to important documents.

By design, an executive committee is a smaller group. They are more flexible and meet on short notice to take decisions in a crisis. This allows the whole board to focus on larger issues in their periodic meetings.

An executive committee can also handle a variety of routine issues and act as a substitute for the organization in instances that the board is not required to be present, like regular financial or legal procedures. It is also a way to review controversial ideas and determine how the organization handles them prior to present them https://boardroomsupply.com/flexibility-with-digital-data-room/ to the board. 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 balances.