Executive Committee Vs Board of Directors

A board of directors https://boardroomsupply.com/how-to-run-a-board-meeting/ is responsible for the strategic planning and decision-making of their company based on their vision, goals and values. They can do so because they are a group of individuals, who are elected by the shareholders to hold power over the company and its assets.

However, boards are incredibly busy, and it’s not always feasible for them to attend meetings and handle the many important issues that nonprofits face every day or in an emergency. This is why many boards opt to form an executive committee. An executive committee is a group of people with a close connection to leadership that can be brought together with a short notice to discuss important issues impacting the board.

The executive committee is a consultative body to the board. They are more likely to meet regularly, move fast and are in a position to draw upon research results to offer recommendations to the board. This lets the board concentrate on issues of higher importance and delegate lower-level issues to the committee to tackle.

Additionally, the executive committee can address workplace issues that should be addressed at the senior-most level, and also take the lead in development of the board by training, mentoring and conducting annual self-evaluations of board members. This simplifies many of the tasks that boards must perform and keeps everyone on the same board when it comes down to making decisions and ensuring alignment.

It is essential that both the executive committee as well as the board of directors are aware that they are ultimately responsible to the board. They will be required to provide regular meeting minutes, documentation and a written record of votes. This is because in common law jurisdictions, directors are believed to as agents of the business and must bind the company by their acts. This is a rule that was reinforced by the House of Lords in the 1909 case of Turquand’s v Salmon and is still widely accepted.

Board Portal Pricing Comparison<<

About the author : admin