The board of directors is a high-ranking governing body for a company. The board is accountable for the company’s goals as well as the decision-making processes. The board of directors consists of senior leaders who are elected or appointed by the members. Its powers, duties and responsibility are defined by corporate regulations as well as by the law of the land. constitution and by-laws.
An executive committee is an enlightened, smaller group that is closely linked to the executive leadership. They may be able to meet at short notice to discuss urgent issues that affect the company and then bring the issue to the attention of the entire board. Based on the structure of the company and bylaws, the executive committee may be able to perform the same duties as the board of directors or it could be tasked with a specific set of duties.
Typically, the executive committee consists of the chairperson, vice-chairperson, and treasurer of the board. The chairperson is also the spokesperson for the company and ensures that all committee and board activities are in line with the mission. The executive committee is also an option if the organization needs to quickly tackle repetitive matters or controversial ideas, as this group can be used to scrutinize and approve matters before bringing them to the full board.
It is crucial, however, to ensure that the committee doesn’t assume decision-making responsibilities that are properly the responsibility of the board in general. An executive committee should have an unambiguous chart of its purpose, a clear procedure to delegate authority, and an internal set of checks and balances.