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Executive Committee Vs Board of Directors

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The executive committee is the subcommittee of the board of directors. It is the organ of the organization’s governing body that supervises the management, decides on strategy and supervises its members. The members are elected by the members or shareholders. They meet regularly to evaluate the financial performance of the business, set policies and appoint senior management. It is the governing body which ensures that good governance practices are adhered to.

Executive committees, unlike the full board are smaller groups that have close ties to their leaders. They can meet swiftly and with short notice to address important issues such as urgent workplace issues, high-level strategic decisions, or organisational supervision. They are usually accountable 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 might also be responsible for appointing new CEOs and conducting evaluations of the performance of CEOs and reporting them to the board.

The executive committee functions as the steering wheel for the board, giving priority to issues the board should consider. However, it is essential that the executive committee be fully transparent with the rest board on its decisions and respects the full board’s guidelines. It is suggested that, to accomplish this the executive committee be a permanent committee of board with a fixed tenure and formal timeframes. This allows the entire board to know the moment an issue has been addressed by the executive committee, or if it requires the attention of the entire board.

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