Executive Committee Vs Board of Directors

A board of directors is in charge of strategic planning and making decisions for their company based on their goals and values. They can do so because they are a fusion of individuals who are elected by shareholders to have control over the company and its assets.

Boards are very busy and aren’t able to meet regularly to discuss all the crucial issues facing a non-profit especially during an emergency. Many boards set up an executive committee to handle these issues. An executive committee is a group of individuals with a https://boardroomsupply.com/how-to-run-a-board-meeting/ close connection to leadership that can be brought together on short notice to address the most pressing issues impacting the board.

The executive committee acts in a role of advisory to the entire board. They typically meet more frequently they are more efficient and swift in their movements. They are adept at leveraging research results to offer recommendations to the board. This enables the board to concentrate on issues of higher importance and delegate the smaller issues to the committee to consider.

Additionally the executive committee will often focus on workplace issues that must be addressed at the top level, and also take the lead in board development by educating, mentoring and conducting annual self-evaluations for the board. This simplifies many of the things that the board must carry out and helps keep everyone on the same level when it comes to the decision-making process and alignment.

It is essential that the executive committee as well as the board of directors are aware that they are ultimately accountable to the board. They must submit regular meeting notes, a record of the meeting, and a record on votes. In common law jurisdictions directors are considered to be agents of the company and their actions are binding on the company. This principle was affirmed by the House of Lords’ in the 1909 case Turquand v Salmon, and is widely accepted.