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The board of directors is the top the governing body of a business. This body is responsible for the company’s goals as well as the decision-making process. The board of directors is made up of senior leaders who are appointed or elected by the members. Its powers, duties and responsibility are defined by laws and regulations of the government as well as the corporation’s constitution and by-laws.
An executive committee is a smaller committee with close ties to the management and who can meet on short notice to discuss urgent issues that impact the company and then bring them to the full board’s attention. The executive committee has the same responsibilities and duties as the board, contingent on the organization’s structure and its bylaws.
Typically, the executive committee consists of the chairperson, vice-chairperson, and treasurer of the board. The chairperson also acts as the spokesperson, and ensures that all activities of the board and committee are in line with the company’s goals. The executive committee can also be a good choice when the company is seeking to tackle issues that are frequently asked or ideas that are controversial. The executive committee can be utilized to approve and vet the proposed ideas prior to being presented to the board in its entirety.
However, it’s crucial to make sure the committee does not take on the decision-making power that according to the bylaws belongs to the full board. An executive committee should have a clear charter, a clearly defined procedure for delegating authority and an internal set of checks and balances.
